PayPal, Coinbase Partner to Boost PYUSD Stablecoin Adoption

Coinbase and PayPal have joined forces to promote PYUSD as a major stablecoin, offering additional benefits for customers using PayPal’s stablecoin. This collaboration includes fee waivers and direct transfers between PYUSD and USD, which is a significant advantage for PayPal as it seeks to expand into the cryptocurrency business. PayPal launched PYUSD in 2023 with the vision of using it for worldwide transfers, thereby lowering fees and limiting currency exchange rates. Stablecoins are increasingly popular due to their utility in transferring funds quickly and often without incurring any fees.

PYUSD has faced challenges in gaining market share, currently holding only 1% of the stablecoin market with a market cap of $730 million. In comparison, Tether’s USDT has a market share of about 66%, and Circle’s USDC has a market share of about 28%. This collaboration with Coinbase is expected to boost PYUSD’s presence in the market. PayPal’s integration with Coinbase will allow the company to fulfill its vision of using PYUSD to make transfers worldwide, thus lowering fees and limiting currency exchange rates.

PayPal’s collaboration with Coinbase is mutually beneficial. PayPal gains access to Coinbase’s extensive network, enabling wide-reaching, stablecoin-based solutions for businesses and remittances. This partnership is aimed at furthering crypto adoption with PYUSD at the center of innovation and global trade. PayPal announced a rewards program offering 3.7% annual rewards in PayPal and Venmo wallets, with customers able to collect daily rewards and receive monthly payouts. Reward systems are particularly popular during economic crises, such as with shopping vouchers and other types of tokenized value.

Alex Chriss, PayPal CEO, stated, “We’re demonstrating our commitment to an innovative, commerce-ready ecosystem by enabling it for the settlement of cross-border transfers, vendor payments, and in the future for additional payment use cases like payouts and bill pay.” Coinbase also highlighted that the collaboration would explore more on-chain options to increase the utilization of stablecoins. With Coinbase’s expertise, they could try out other forms of digital payments for PYUSD and engage directly with DeFi ecosystems. Coinbase and PayPal previously collaborated in 2021 when the exchange allowed users to buy and withdraw using PayPal. Despite PYUSD having only a 1% market share, it benefits from a wide-reaching network and a loyal user base, positioning it as a major player in the stablecoin market.