Coinbase has expanded its partnership with PayPal to support the broader adoption of PayPal USD (PYUSD), the dollar-backed stablecoin issued by Paxos. The move aims to improve access and utility for both retail and institutional users.
As part of the collaboration, Coinbase will support 1:1 conversions between PYUSD and U.S. dollars on its trading and custody platforms. The exchange will also eliminate conversion fees to encourage usage and simplify access to the stablecoin.
Institutional Integration and Use Cases
Coinbase said it plans to integrate PYUSD into its infrastructure to facilitate use by PayPal’s larger network of merchant partners. The companies also intend to explore new on-chain use cases, potentially extending stablecoin utility into areas like decentralized finance.
No timeline has been given for the broader merchant rollout. However, Coinbase said the partnership will involve continued exploration of PYUSD applications across digital payments and blockchain-based financial services.
Rising Stablecoin Demand
The announcement comes amid rising global interest in stablecoins for faster, lower-cost transactions. According to Coinbase, stablecoin transaction volume surged from $6.2 trillion in 2023 to $22 trillion in 2024 — a 250% increase.
PYUSD, launched by PayPal in 2023, is backed by U.S. dollar deposits and regulated by the New York State Department of Financial Services. The stablecoin is designed for seamless movement of value between fiat and crypto environments.
Ongoing Collaboration
Both companies signalled that the partnership will evolve as they adapt to changes in the digital payments landscape. Financial details of the agreement were not disclosed.
The initiative reflects a broader trend of collaboration between traditional financial services and digital asset platforms as blockchain technology becomes more integrated into mainstream payments infrastructure.
