Coinbase is waiving fees for transactions involving PayPal’s PYUSD stablecoin, allowing easy redemption for US dollars. This collaboration aims to enhance PYUSD’s adoption among merchants. Both companies plan to explore stablecoin use cases in decentalised finance and eye future payment technologies. With U.S. Congress working on stablecoin regulations, the partnership could help PYUSD gain market traction.
In a significant move for both Coinbase and PayPal, the largest publicly traded cryptocurrency exchange has announced it will waive fees on transactions involving PayPal’s stablecoin, PYUSD. This change will allow users to exchange the stablecoin directly for U.S. dollars. It’s a pivotal step for PayPal, which is focusing more on crypto transactions.
This initiative aims to boost the adoption of PYUSD, which PayPal launched in 2023, and facilitate the settling of payments for merchants using this stablecoin instead of traditional financial systems. Stablecoins, which are designed to keep a steady value—typically pegged at 1:1 to the dollar—are gaining traction, especially among crypto traders looking to transfer funds between different tokens quickly.
Jose Fernandez da Ponte, PayPal’s senior vice president for blockchain and digital currencies, noted that this collaboration with Coinbase is about uniting their customer bases and fostering a powerful synergy between the two companies. Both firms are eyeing future projects to promote stablecoin use and investigate potential applications of PYUSD within decentralised finance realms, enabling transactions directly on blockchain without intermediary assistance.
Lauren Abendschein, Coinbase’s global head of institutional sales, emphasised the partnership’s goal is to advance global payments by putting stablecoins into the mainstream consciousness and driving technology forward. Until now, Coinbase exclusively offered fee waiving for Circle’s USDC, the second-largest stablecoin by market cap.
Fernandez da Ponte remarked there’s a possibility that users may choose between PYUSD and USDC for payments and affirmed their goal is to position PYUSD as a top choice in the stablecoin arena. Meanwhile, Circle has also ramped up its stablecoin usage, announcing their Circle Payments network for cross-border transactions and real-time settlements.
As of now, stablecoins hold a considerable market cap of over $238 billion, according to CoinGecko, although PayPal’s PYUSD currently sits at a modest $872 million. This partnership could enable PYUSD to attract a larger market share via the Coinbase integration.
This development comes at a time when there are movements in Congress to solidify regulations for stablecoins, with both the House and Senate barely advancing proposals. The White House has expressed a desire for these regulations to come to fruition by August.
In related news, President Trump is pushing a broader overhaul of U.S. cryptocurrency regulations, motivated by support from the crypto industry during his campaign. He’s appointed industry-friendly figures to crucial regulatory bodies and recently signed an executive order aimed at establishing a strategic cryptocurrency reserve. Furthermore, his company, Trump Media & Technology Group, announced plans to diversify its offerings to include various investment products, including crypto.
(Reporting by Hannah Lang in New York; Editing by Leslie Adler)
