PayPal and Coinbase have announced a significant expansion of their strategic partnership, aimed at propelling the growth of PayPal USD (PYUSD), a regulated USD-denominated stablecoin introduced by PayPal in 2023.
PayPal and Coinbase deepen alliance
In case you have not been paying attention to the stablecoin market lately – the move signals a bold step towards mainstream integration of them within digital commerce and cross-border financial ecosystems.
The enhanced collaboration is positioned to deliver value to consumers, enterprises, and institutions by advancing the utility, distribution, and adoption of PYUSD.
As part of the agreement, Coinbase users will now enjoy seamless access to PYUSD with zero platform fees, coupled with the ability to redeem their holdings 1:1 for US dollars.
This integration positions Coinbase as a key channel for boosting PYUSD’s liquidity and market presence.
“For years, we’ve worked with Coinbase to provide an easy and secure on-ramp for crypto purchases via PayPal,” said Alex Chriss, President and CEO of PayPal.
“With PYUSD, we are now focused on building deeper commerce applications, leveraging our payments infrastructure to bring stablecoin benefits to a broader audience.”
The partnership also outlines ambitions for joint innovation in decentralised finance (DeFi), with both companies exploring onchain use cases for PYUSD.
This includes its application in vendor payments, peer-to-peer transfers, B2B transactions, and potentially bill payments and payouts in the near future.
3.7% Interest on PYUSD Balances
While PYUSD’s share of the overall stablecoin market remains modest — under 1% according to CryptoQuant — PayPal is leveraging its extensive global network of over 430 million users to increase traction.
A newly launched rewards initiative offers US PayPal and Venmo users a 3.7% annual yield on their PYUSD balances.
These rewards can be instantly used for everyday transactions, currency exchanges, and purchases across millions of merchants via PayPal Checkout.
For merchants, the integration means the option to settle transactions directly in PYUSD, bypassing traditional financial rails.
This could present cost and speed advantages in global commerce, particularly in cross-border transactions.
Brian Armstrong, CEO of Coinbase, remarked, “PayPal’s massive user base presents an unprecedented opportunity to scale stablecoin adoption. Together, we are laying the groundwork for a future where digital dollars become a standard medium of exchange.”
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