PayPal Just Gave Crypto Its Own Team — But Its Stablecoin Is Shrinking Fast
PayPal built a dedicated crypto division after record Q2 earnings, but its PYUSD stablecoin has lost over $1B in supply since March.
PayPal just made crypto official inside its own walls. The payments giant reported a record $486.4 billion in total payment volume for the second quarter, and alongside those numbers it confirmed a company reshuffle that gives crypto its own dedicated business unit for the first time. But there’s a twist: the very stablecoin PayPal is betting on has been shrinking for months, not growing.
For anyone holding PYUSD, PayPal’s own dollar-pegged token, or just curious whether the world’s biggest payments brand is finally going all-in on crypto, this earnings report is worth a closer look.
A new team, three big bets
PayPal’s Q2 results, disclosed on July 28, showed payment volume up 10% year over year to $486.4 billion. Revenue climbed 5% to $8.68 billion, and non-GAAP earnings came in at $1.38 per share, beating analyst expectations of around $1.28. The company also raised its full-year guidance, now expecting roughly $15.6 billion in transaction margin dollars and lifting the bottom of its earnings range to about $5.38 per share.
Buried inside that strong quarter was a structural change that matters more for crypto holders than the headline numbers: PayPal has created a unit called Payment Services & Crypto, sitting alongside its other core divisions. In its investor presentation, the company grouped stablecoins together with two other growth bets, “agentic commerce” and identity and biometrics, under a section it labeled “innovating with discipline.”
In plain terms, PayPal isn’t treating crypto as a side experiment anymore. It’s being built into the company’s core structure, with its own leadership and its own line in the budget. For everyday PayPal users, that likely means more crypto-linked features showing up inside the app over time, not fewer.
PYUSD is losing ground, not gaining it
Here’s the part that should give holders pause. PYUSD’s supply sat near $2.8 billion in mid-July, down sharply from more than $4 billion back in March. That’s a meaningful drop for a token PayPal is publicly leaning into as one of its three strategic priorities.
The stablecoin did pick up some real-world usage this year. It went live natively on Polygon on July 9 through issuer Paxos, and PayPal says PYUSD now reaches 70 markets. YouTube also began paying US-based creators in PYUSD back in December, giving the token a genuine, non-speculative use case.
But the bigger picture, based on research from CoinGecko, is that PYUSD and Societe Generale’s EURCV together still hold only a small slice of the fiat-backed stablecoin market. Tether’s USDT and Circle’s USDC dominate with a combined 93.5% of supply. For everyday holders, that’s a reminder that “PayPal has a stablecoin” doesn’t automatically mean it’s the one moving money around the crypto economy right now.
Crypto holdings are still costing PayPal money
PayPal’s own crypto and strategic investment portfolio isn’t exactly a profit center yet. The company recorded an $81 million net loss on those holdings this quarter, up from a $74 million loss in the first quarter. Both figures were added back when PayPal calculated its adjusted, non-GAAP earnings, meaning the losses were excluded from the headline profit beat investors reacted to. Over the full 2025 fiscal year, that same portfolio actually added about $0.14 per share to GAAP earnings, so the picture has been mixed rather than consistently bad.
The reorganization also comes under a new boss. Enrique Lores took over as CEO on March 1 after Alex Chriss departed, and he’s since laid out a cost-cutting plan targeting at least $1.5 billion in savings over the next two to three years, with about $400 million expected by the end of this year. The plan runs through 2029 and leans heavily on AI, which PayPal expects to deliver around 40% of those savings.
What it means for your wallet
If you use PayPal, this quarter signals the company is serious about making stablecoins and crypto tools a permanent part of how it does business, not a passing trend. That’s generally good news for accessibility, more markets, more integrations, more everyday uses like creator payouts.
But if you’re holding PYUSD specifically, the shrinking supply is worth watching. A falling supply can simply mean fewer people are parking dollars in the token right now, which isn’t necessarily a red flag on its own, but it does show PYUSD still has real competition to catch up to bigger stablecoins that dominate the market. New corporate commitment doesn’t guarantee market share.
Read more: Crypto Payments Are Going Invisible — Here’s What That Means for Everyday Holders
