Fiserv, PayPal Partner to Build Stablecoin Interoperability

Fiserv Inc. and PayPal Holdings Inc. announced Monday they are partnering to build interoperability between their respective stablecoins, FIUSD and PayPal USD (PYUSD), to enable consumers and businesses to transfer funds domestically and internationally.

The partnership aims to leverage both companies' global reach across banking, consumer, and merchant payments to expand stablecoin adoption and programmable payments worldwide, Fiserv said in a statement . The company operates a network of approximately 3,000 regional and community banks, while PayPal serves millions of consumers and merchants globally.

"Our expanded relationship with PayPal furthers our mission to scale stablecoin-powered payments—leveraging our position at the intersection of banking and commerce to build more efficiency and optionality into the payments ecosystem," said Takis Georgakopoulos, chief operating officer at Fiserv.

The companies plan to integrate both stablecoins into various payment flows, including cross-border transactions, payouts, and merchant solutions. The collaboration addresses common business challenges such as slow payment processing, inflation concerns, and currency volatility through blockchain-based technology that enables faster transfers at any time of day.

Fiserv announced the development of FIUSD as a "bank-friendly stablecoin" that will allow financial institutions of all sizes to offer next-generation banking solutions to consumer and commercial clients. The platform will be built on Fiserv's existing payments infrastructure, which processes trillions of dollars in transactions annually.

PayPal's PYUSD, launched in 2023, has been used for startup funding, cross-border transfers via Xoom, and vendor invoice reconciliation. Frank Keller, executive vice president at PayPal, said the partnership will "help bridge the gap between traditional financial systems and new technologies, enabling faster, more cost-effective, and globally accessible payment options for merchants."

Fiserv stock rose 4.41% following reports of the stablecoin initiative, and is up a further 4.45% in after-hours trading. The company is partnering with blockchain platform Solana and stablecoin companies Circle Internet Group and Paxos for the project. The platform is expected to launch by the end of 2024 and will be compatible with other stablecoins.

The announcement comes as the US Congress advances legislation that could accelerate stablecoin adoption for everyday transactions. Stablecoins function as digital dollars within the cryptocurrency ecosystem, maintaining stable value pegged to traditional currencies while enabling rapid transfers and trading between different digital tokens.