PayPal reported a better-than-expected second quarter last year, but its crypto ambitions are facing headwinds. The payments giant created a dedicated 'Payment Services & Crypto' unit as part of a broader reorganization, while its stablecoin PYUSD saw its supply nearly halve from March to July 2025. Meanwhile, PayPal's crypto holdings — including PYUSD — cost the company $81 million in net losses on strategic investments during the quarter.
The new crypto unit
PayPal split its business into three divisions: Checkout Solutions, Consumer Financial Services, and Payment Services & Crypto. The move gives crypto a standalone seat at the table for the first time. The company listed stablecoins as one of three key expansion areas under its 'innovating with discipline' strategy, alongside agentic commerce and identity/biometrics. CEO Enrique Lores, who took the role on March 1 after Alex Chriss departed, is betting that a focused structure can turn crypto from a cost center into a growth driver.
PYUSD's shrinking supply
PYUSD's supply stood at roughly $2.8 billion in mid-July 2025, down from over $4 billion in March. That's a 30% drop in about four months. The stablecoin went live natively on the Polygon blockchain on July 9 via issuer Paxos, and YouTube began paying US-based creators in PYUSD in December 2024. But according to CoinGecko research, PYUSD and Societe Generale's EURCV stablecoins hold minimal market share. USDT and USDC dominate 93.5% of fiat-backed stablecoin supply. PayPal says PYUSD reaches 70 markets globally, but the numbers show it's still a niche player.
Cost savings and guidance
Despite the crypto drag, PayPal's core business is humming. Total payment volume hit $486.4 billion in Q2 2025, up 10% year-over-year. Revenue rose 5% to $8.68 billion. Non-GAAP earnings per share came in at $1.38, beating analyst estimates of $1.28. The company raised its full-year 2025 transaction margin guidance to approximately $15.6 billion and its non-GAAP EPS guidance to roughly $5.38. Lores is targeting at least $1.5 billion in gross run-rate savings over two to three years, with about $400 million expected by year-end 2025. The cost-saving plan runs to 2029 across three drivers: simplified structure, operational and portfolio optimization, and accelerated AI adoption — the last expected to deliver roughly 40% of the savings.
The new unit gives crypto a permanent organizational home at PayPal. But the shrinking PYUSD supply and the $81 million quarterly loss on crypto investments suggest the payoff isn't here yet. PayPal's cost-cutting plan, which runs to 2029, will need to deliver.
