TL;DR
- PayPal and Coinbase expanded their partnership to remove fees for operating with PYUSD on Coinbase and boost its adoption in regulated markets.
- The agreement includes plans to integrate PYUSD into DeFi environments and onchain services, offering institutions a stable alternative for payments and transfers.
- PayPal plans to add an annual yield of 3.7% for those holding PYUSD while aiming to consolidate its position against USDT and USDC.
PayPal and Coinbase announced an expansion of their partnership to drive the adoption of PayPal USD (PYUSD), the stablecoin backed by U.S. dollars.
The initiative removes fees for operating with PYUSD on Coinbase, allowing users to buy, sell, and redeem this asset for dollars at a 1:1 rate directly from the platform. This move aims to promote its everyday use and increase its circulation in regulated markets.
The agreement also involves collaboration on the development of new solutions for digital payments and the integration of PYUSD into DeFi environments. Both companies are exploring ways to use the stablecoin in decentralized protocols and onchain services, with the goal of extending its utility beyond exchanges. Additionally, the alliance will benefit the thousands of institutions already operating with cryptocurrencies, offering them a stable alternative to manage funds and conduct cross-border transactions.
PayPal Challenges Circle and Tether
Since its launch in August 2023, PYUSD has sought to position itself among the leading stablecoins in the market. By mid-2024, PayPal enabled its use on the Solana network and added new purchase channels through MoonPay, while partnering with Anchorage Digital to implement a rewards program tied to stablecoin usage. In parallel, the company will introduce an annual yield rate of 3.7% starting mid-2025 for those holding PYUSD in their PayPal or Venmo wallets.
Currently, PYUSD holds a market capitalization of $866 million and has generated a daily trading volume of $24.3 million. Although its size is still far from giants like USDT and USDC, this new strategy aims to foster adoption among retail users, developers, and businesses.
Coinbase, for its part, seeks to remain competitive among exchanges as one of the most relevant in the United States. Its platform reached a trading volume of $439 billion during the last quarter of 2024.
