PayPal Expands Crypto Payment Options to 100+ Coins for U.S. Merchants as PYUSD Faces New York Regulatory Hurdles

PayPal Inc. has launched a new feature allowing U.S. merchants to accept over 100 cryptocurrencies at checkout, a move to accelerate crypto adoption in mainstream commerce. Dubbed “Pay With Crypto,” the service lets businesses convert customer payments in real time to U.S. dollars or PayPal’s stablecoin, PYUSD, with no additional setup beyond enabling the option in PayPal’s business tools. The feature supports major assets like Bitcoin, Ethereum, USDT, XRP, and Solana, as well as memecoins such as TRUMP and FARTCOIN. Funds are deposited directly into merchants’ accounts via centralized or decentralized exchanges, depending on the token type [1].

To reduce transaction costs, PayPal initially charges a 0.99% fee for the first year, rising to 1.5% afterward—a rate lower than typical international credit card fees. CEO Alex Chriss emphasized the initiative’s role in addressing global commerce barriers, stating, “We’re removing these barriers and helping every business of every size achieve their goals,” and highlighting the ease of cross-border payments enabled by crypto [1].

However, the rollout faces a regulatory hurdle. PayPal’s stablecoin, PYUSD, has not secured approval from the New York State Department of Financial Services (NYDFS) for use by New York residents, potentially limiting its availability in the state until clearance is obtained. This aligns with broader scrutiny of stablecoins under the newly enacted GENIUS Act, which shifts focus from interest-earning to payment-centric use cases. The act’s restrictions on interest-bearing stablecoins could pressure issuers to prioritize low fees, speed, and integrated trading features [1].

A critical risk remains unaddressed: neither PYUSD nor other digital assets are insured by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC). This exposes users to financial risks in cases of service failure, a concern for merchants and consumers adopting crypto-based solutions [1].

The initiative reflects PayPal’s strategic pivot toward crypto, aiming to bridge the gap between decentralized finance and traditional commerce. By reducing costs and expanding payment options, the company seeks to position itself as a leader in global fintech. Yet the regulatory uncertainty around PYUSD and the absence of federal guarantees underscore the challenges of scaling crypto adoption. Analysts suggest that the GENIUS Act’s framework could stabilize the market over time but may also limit innovation if compliance costs outweigh benefits [1].

The expansion of crypto options for merchants comes as broader regulatory scrutiny intensifies. While PayPal’s efforts to lower barriers for global commerce align with market trends, the interplay between innovation and oversight will likely shape the trajectory of crypto payments in the U.S.

Source: [1] [PayPal Opens 100+ Crypto Payment Options for US Merchants, But PYUSD Hits Regulatory Snag] [https://coinpedia.org/news/paypal-opens-100-crypto-payment-options-for-us-merchants-but-pyusd-hits-regulatory-snag/]