Coinbase and PayPal Expand Alliance to Turbocharge PYUSD, Challenge Stablecoin Giants

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Hassan Shittu

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Hassan Shittu

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April 23, 2025

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Coinbase and PayPal are deepening their partnership to accelerate the adoption and usage of PayPal USD (PYUSD), the U.S. dollar-backed stablecoin launched in 2023, according to an announcement on Thursday.

The expanded collaboration is looking to enhance access to PYUSD for both retail and institutional users, promote its use in commerce, and explore broader on-chain applications.

The Alliance seeks to Push Stablecoin Adoption with PYUSD

The companies announced the partnership expansion, showcasing plans to drive stablecoin adoption by offering seamless integration between PayPal’s payments ecosystem and Coinbase’s crypto infrastructure.

Central to the initiative is the removal of conversion fees between U.S. dollars and PYUSD on Coinbase, a move designed to encourage usage by lowering entry barriers for users.

Coinbase will provide direct buy, sell, and trade access to PYUSD with zero platform fees, allowing users to redeem the stablecoin 1:1 for U.S. dollars.

The initiative will also extend PYUSD availability to Coinbase’s institutional clients, as well as to PayPal’s extensive merchant network, to facilitate the use of stablecoins in payments and business operations.

Brian Armstrong, CEO of Coinbase, called the partnership a major opportunity for growth.

“We’re excited to be partnering with PayPal. Their more than 430 million consumer and merchant accounts offer an unprecedented opportunity to increase stablecoin adoption globally,” he said.

Alex Chriss, President and CEO of PayPal, emphasized the company’s shared commitment to advancing digital finance.

“For years, we’ve worked with Coinbase to enable a best-in-class integration to provide a simple, familiar way for PayPal users to fund crypto purchases on Coinbase,” Chriss said.

“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center.”

The collaboration also focuses on developing new PYUSD-based payment solutions and decentralized finance (DeFi) applications.

According to Coinbase, the companies will work jointly to explore on-chain use cases for stablecoins, seekingto unlock more efficient global money movement and enhance financial utility for users and businesses alike.

The announcement builds on an existing relationship between the two companies, which began in 2021 when Coinbase allowed PayPal as a funding method for crypto purchases and withdrawals.

With this latest development, both firms are positioning PYUSD to play a more central role in the growing stablecoin economy.

Stablecoin Competition Intensifies as Coinbase Backs PayPal’s Bid for Global PYUSD Growth

The partnership between Coinbase and PayPal comes at a key juncture for the stablecoin market, which is rapidly evolving beyond its roots in crypto trading.

With U.S. lawmakers expected to pass stablecoin-specific legislation later this year, the industry is racing to position itself for mainstream adoption, and payments are at the center of it.

Stablecoins, particularly dollar-pegged ones, have become key tools for cross-border payments and institutional transfers, providing faster and more cost-effective alternatives to traditional systems.

Analysts at Standard Chartered expect the sector to balloon to $2 trillion by 2028, up from roughly $220 billion just a year ago.

PayPal’s PYUSD, launched in 2023 and now offering a 3.7% yield to U.S. holders, remains a minor player, with a market share of just under 1%. But its integration with Coinbase could help change that.

The exchange, which already shares USDC revenue with Circle from the USDC stablecoin, is now betting on PYUSD’s potential to capture a slice of the payments market.

Meanwhile, rivals are not standing still. Circle launched a remittance-focused network, Ripple entered the race with RLUSD, and Tether is reportedly planning a U.S.-focused stablecoin.