Coinbase, the largest publicly traded cryptocurrency exchange, is eliminating transaction fees for trades involving PayPal’s stablecoin, PYUSD, and will now allow users to redeem the token directly for U.S. dollars — a significant step forward in PayPal’s push to expand crypto-based payments.
The move is part of a growing collaboration between Coinbase and PayPal to accelerate adoption of PYUSD, which launched in 2023. With this integration, PayPal merchants can now settle transactions directly in PYUSD, bypassing traditional financial systems.
“This is a powerful combination,” said Jose Fernandez da Ponte, PayPal’s senior vice president for blockchain and digital currencies. “It connects the consumer bases of PayPal and Coinbase, and merges merchant capabilities with Coinbase’s institutional access.”
Stablecoins like PYUSD — cryptocurrencies pegged to a fixed value, usually the U.S. dollar — are widely used to facilitate instant payments and trading within the digital asset ecosystem. With over $238 billion in stablecoins circulating globally, PayPal’s coin currently holds a modest market cap of $872 million. But the Coinbase integration is expected to give it a stronger foothold in the competitive space.
Coinbase had previously offered zero-fee transactions only for Circle’s USDC, the second-largest stablecoin by market cap. With PYUSD now receiving similar treatment, the companies are positioning it as a leading option for payments.
“We want to make sure PYUSD is seen as the best stablecoin for payments,” said Fernandez da Ponte.
Coinbase and PayPal also plan to explore new use cases for PYUSD across decentralized finance platforms, aiming to drive wider mainstream adoption.
The partnership comes as the U.S. moves closer to regulating stablecoins, with Congress working on legislation to establish formal rules. The White House has called for a final bill by August, underscoring Washington’s growing focus on crypto regulation.
