Coinbase, the largest publicly traded cryptocurrency exchange, announced today that it will waive transaction fees for PayPal PYUSD transactions on the trading platform as part of a strategic partnership to promote the use of stablecoins in global payment systems.
This partnership also brings in the feature to redeem PYUSD into U.S. dollars, enhancing its utility in everyday transactions.
Launched in 2023, PYUSD is a dollar-pegged stablecoin created by PayPal and Paxos.
Moreover, merchants on its network will now be able to settle directly in PYUSD rather than using conventional financial rails thanks to the integration with Coinbase, according to PayPal.
PayPal and Coinbase team up to push stablecoins from trading tool to mainstream payment rail
Cryptocurrency investors have widely adopted stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg. They use it to move funds between tokens.
In addition, stablecoins’ use has grown dramatically in recent years, and proponents like PayPal asserted that they could be used to send money instantly.
Jose Fernandez da Ponte, PayPal’s senior vice president for blockchain, crypto, and digital currencies, said linking PayPal’s and Coinbase’s vast customer networks—along with PayPal’s merchants and Coinbase’s institutional reach—creates “an incredibly powerful combination.”
Furthermore, the two businesses planned to work together on upcoming projects to increase the usage of stablecoins for payments and look into PYUSD’s possible uses on decentralized finance platforms, which allow users to transact directly on a blockchain network without the need for middlemen.
A global head of institutional sales at Coinbase, Lauren Abendschein, also elaborated on the collaboration, stating that the goal of that union was to take stablecoins mainstream, advance that technology, and improve the future of international payments.
Coinbase had previously only offered Circle’s stablecoin, USDC, which came in second in market capitalization, the same zero-fee treatment.
Following this, Fernandez da Ponte said they wanted to ensure that PYUSD was the most popular stablecoin for payments because, in some payment scenarios, people will surely have to choose between PYUSD and USDC.
Circle expands stablecoin use as U.S. lawmakers push for regulations
Circle has increased the number of payments made with its stablecoin. The company recently announced the launch of its Circle Payments network, designed to help financial institutions settle stablecoins in real-time and make cross-border payments.
According to an analysis from CoinGecko, stablecoins have a market capitalization of approximately $239 billion. Although PayPal’s stablecoin only has a market value of $872 million, its integration with Coinbase could help it increase its market share.
The timing of the collaboration coincides with mounting momentum in Congress to establish America’s first stablecoin rulebook. Both the House and Senate have moved versions of a comprehensive framework forward, and the White House has signaled it wants a finished bill on the President’s desk by August.
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