In a bid to accelerate adoption of PayPal USD (PYUSD), PayPal and Coinbase have announced a major partnership that will eliminate all trading fees tied to the stablecoin on the Coinbase platform. The announcement, made Thursday, allows users to buy, sell, and convert PYUSD to U.S. dollars without incurring any additional costs.
The fee waiver is part of a broader alliance between the two financial giants aimed at elevating PYUSD’s relevance in both centralized and decentralized ecosystems. In a joint statement, Coinbase and PayPal said they are actively exploring new applications for PYUSD within decentralized finance (DeFi)—signaling ambitions to expand the stablecoin’s utility beyond traditional payments.
“For years, we’ve worked with Coinbase to enable a best-in-class integration,” said PayPal CEO Alex Chriss.
“Our objectives aligned further as we deployed PYUSD in combination with our payments expertise, enabling greater commerce applications.”
The collaboration comes amid heightened competition in the $228 billion stablecoin market, where incumbents like USDT and USDC continue to dominate. With zero-fee trading and a focus on DeFi integration, PayPal and Coinbase are positioning PYUSD as a strong challenger—bridging mainstream payment rails with blockchain-native systems.
PayPal Expands PYUSD Playbook With Yield Rewards
Coinbase’s fee-free initiative follows an aggressive expansion strategy from PayPal to establish PYUSD as a mainstream digital asset. Most notably, PayPal recently announced a 3.7% annual yield on PYUSD balances held in PayPal and Venmo wallets, expected to launch in summer 2025.
The company is also scaling its blockchain footprint. After launching PYUSD on Ethereum in August 2023, PayPal expanded to Solana in May 2024 to enable faster, cheaper transactions. It has since partnered with Anchorage Digital to introduce rewards for stablecoin usage and joined forces with MoonPay to simplify PYUSD purchases across various payment methods.
These developments reflect PayPal’s ambition to make PYUSD a versatile, cross-chain asset—no longer confined to its own platform, but integrated across wallets, DeFi protocols, and merchant tools.
PYUSD Lags Behind, But Adoption Momentum Builds
Despite these initiatives, PYUSD remains a relatively small player in the stablecoin market. As of April 24, it has a market capitalization of $866 million and a 24-hour trading volume of $24.3 million, according to CoinGecko.
By comparison, Tether’s USDT leads with nearly $146 billion in circulation, while Circle’s USDC holds close to $62 billion—together commanding over 90% of the market.
Still, Coinbase’s backing gives PYUSD a powerful launchpad. In Q4 2024 alone, Coinbase processed $439 billion in trading volume, making it a major hub for stablecoin liquidity and institutional flows. With new incentives and deeper integration, PayPal is betting on steady gains as regulatory clarity improves and stablecoin adoption enters the next phase.
“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,” said Brian Armstrong, CEO, Coinbase.
Quick Facts
- Coinbase has waived all trading fees for PYUSD, enabling free conversions between the stablecoin and U.S. dollars.
- PayPal merchants can now settle in PYUSD, expanding its use case beyond wallets and exchanges.
- The initiative aims to position PYUSD as a stablecoin of choice in both traditional finance and DeFi ecosystems.
- The move coincides with increasing regulatory momentum in the U.S. toward stablecoin legislation and oversight.
