PayPal and Coinbase have announced a major collaboration to remove all transaction fees for PYUSD transactions, their stablecoin backed by the dollar. Users can now buy, sell, and trade PYUSD on Coinbase without any fees, and convert it to dollars at a 1:1 rate directly from the platform.
PayPal and Coinbase: A strategic alliance to democratize PYUSD
This initiative is part of a larger plan to accelerate the adoption of PYUSD. The two giants are also exploring use cases for the stablecoin in decentralized finance (DeFi), with the ambition of building strong bridges between traditional payments and innovative crypto applications.
A lucrative return to enhance the attractiveness of PYUSD
In line with this expansion strategy, PayPal recently announced an annual return of 3.7% for users holding PYUSD in their PayPal or Venmo wallets, starting in the summer of 2025. This rate, significantly higher than that of traditional savings accounts, could attract a wider audience beyond traditional crypto investors.
This decision follows a series of initiatives since the launch of PYUSD in August 2023. In May 2024, PayPal had already extended the use of the stablecoin to the Solana network, partnered with custodian Anchorage Digital to develop a rewards program, and signed a partnership with MoonPay to facilitate the purchase of PYUSD through various payment methods.
PayPal challenges established giants
Despite these efforts, PYUSD remains a small player in the highly competitive stablecoin market. With a market capitalization of 866 million dollars and a daily volume of 24.3 million, it still lags behind the giants that are Tether’s USDT (146 billion) and Circle’s USDC (62 billion), which together represent over 90% of the global stablecoin market estimated at 228 billion dollars.
However, the strategy of close integration between payments and cryptocurrencies could give PayPal a unique competitive advantage. As Alex Chriss, CEO of PayPal, stated, this collaboration with Coinbase “reflects a shared vision of simplicity and accessibility in the adoption of crypto for the general public“.
Coinbase, a pillar of the American crypto ecosystem
On the other hand, Coinbase is strengthening its position as a leader in the American market. With a total volume of 439 billion dollars traded in the fourth quarter of 2024, the platform continues to assert its central role in the transition between traditional finance and the digital economy.
This alliance with PayPal marks a strategic turning point: the goal is no longer just to make stablecoins easily accessible, but to integrate them into everyday use at the intersection of returns, simplicity, and innovation.
