Paxos Joins Forces with PayPal and Venmo to Issue USDH Stablecoin

• Paxos proposes issuance of the Hyperliquid USDH stablecoin
• PayPal and Venmo to Integrate USDH and HYPE Token
• Stablecoin Issuance Competition Includes Frax and LayerZero

Paxos Labs has submitted an updated version of its proposal for the issuance of Hyperliquid's USDH stablecoin, highlighting a strategic alliance with PayPal to expand the token's global distribution. The announcement was made Tuesday as part of a competitive process among issuers seeking the responsibility of launching the stablecoin in the DeFi ecosystem.

Under the proposal, PayPal will integrate USDH into its checkout and payment channels, in addition to listing Hyperliquid's native HYPE token on both PayPal and Venmo. The initiative also includes offering free USDH support in the platform's on-ramp and off-ramp products, ensuring greater accessibility for users and businesses. PayPal has also committed to providing US$20 million in incentives to strengthen the HYPE ecosystem.

Paxos has outlined a rewards system in which revenue generated by USDH will be fully reinvested in growth and the Hyperliquid Relief Fund until the stablecoin reaches $1 billion in total value locked (TVL). The company has capped its revenue share at 5%, even if TVL exceeds $5 billion.

“Together, this structure ensures that Paxos only wins if Hyperliquid wins, and USDH becomes the gateway stablecoin for global DeFi adoption,”

declared the company.

Another point Paxos emphasized is its regulatory compliance. The company stated its compliance with the GENIUS Act and highlighted that it is the only one legally capable of issuing tokens in Europe. Furthermore, it added that it will include PYUSD as a reserve asset to reinforce the stability of USDH.

The proposal also positions Hyperliquid as a liquidity infrastructure for enterprises, expanding its reach beyond the retail market. According to Paxos, fintechs and brokerages will be able to integrate builder codes to access Hyperliquid and HyperEVM, expanding integration with DeFi. The company also plans to launch an "Earn" product linked to USDH for consumption in financial applications.

Among the competitors, Frax Finance submitted a proposal connecting USDH to frxUSD, backed by BlackRock's BUIDL fund. A coalition formed by Agora, Rain, and LayerZero offered a 100% share of the net revenue, while Ethena Labs and Sky are also vying for the position. Voting among Hyperliquid validators will begin on September 14th, after the proposal submission deadline closes on September 10th.