PayPal is making a quiet but meaningful push deeper into decentralized finance.
The payments giant has launched the PYUSD Savings Vault on the DeFi lending platform Spark, giving stablecoin users a new way to earn yield on their PYUSD holdings. For PayPal, this is less about hype and more about utility. For users, it is about turning idle stablecoins into a productive asset.
The numbers are competitive.
Spark currently advertises 4.25% APY on the PYUSD Savings Vault. That puts it in line with yields offered on other stablecoin vaults for USDC, USDT, and Spark’s native USDS, which is issued by parent organization Sky. The yield is tied to the Sky Savings Rate and is funded directly by Sky Protocol’s revenue, not short term incentives.
That revenue engine matters.
Sky generates income through stability fees on overcollateralized loans, investments in real world assets, and liquidity provisioning across Spark. The protocol launched in 2024 with a clear focus on yield generating stablecoin products, including Savings Vaults and the SparkLend decentralized money market.
PYUSD has been part of that ecosystem for months.
In September, PYUSD was integrated into SparkLend, allowing users to supply and borrow the stablecoin. Momentum followed quickly. PayPal and Spark publicly set a target of $1 billion in deposits after roughly $200 million flowed in within the first 24 hours of integration.
Current on chain data shows steady usage. Nearly $150 million in PYUSD is currently supplied, earning around 2.11%, while approximately $67 million has been borrowed. The launch of the new Savings Vault could be the catalyst that pushes those numbers higher.
Under the hood, the structure is designed for scale.
The PYUSD Savings Vault runs on the Spark Liquidity Layer, which deploys deposited stablecoins across Spark’s balance sheet. That includes lending strategies on SparkLend and other yield generating positions. Since the launch of Savings V2 vaults in October, total value locked has climbed to around $395 million.
The allocation model is straightforward.
About 90% of deposits are routed through the Spark Liquidity Layer into yield strategies. The remaining 10% stays in the vault contract, ensuring instant withdrawals. In return, depositors receive the spPYUSD accumulative token, which automatically accrues interest over time.
Current portfolio composition highlights a diversified approach. More than 57% is held in stablecoins, 15.73% is allocated to on chain crypto lending, 10.24% to AAA rated corporate debt, 10.10% to OTC crypto lending, and 5.32% to U.S. Treasurys, with the remainder spread across other strategies.
The timing is notable.
PayPal launched PYUSD in 2023 through a partnership with Paxos, which just received a federal banking charter from the Office of the Comptroller of the Currency on Friday. That regulatory milestone adds another layer of credibility as PYUSD expands beyond payments and into DeFi yield products.
For PayPal, the message is clear. Stablecoins are no longer just for transactions. They are becoming income generating financial tools.
