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.
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.
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.
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.
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.
“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center.”
“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.
Alex Chriss, President and CEO of PayPal, emphasized the company’s shared commitment to advancing digital finance.
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. 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 partnership between Coinbase and PayPal comes at a key juncture for the stablecoin market, which is rapidly evolving beyond its roots in crypto trading.