Chiara Bianchi
PayPal and Coinbase have joined forces in a strategic push to increase the use of PayPal USD (PYUSD) by eliminating all trading fees on the stablecoin, the companies announced on Thursday. Users can now buy, sell, and trade PYUSD without paying any platform fees on Coinbase, while also having the ability to redeem PYUSD 1:1 for U.S. dollars directly through the exchange.
The collaboration doesn’t stop at trading. The two firms revealed plans to explore decentralized finance (DeFi) applications that can expand PYUSD’s functionality. From yield opportunities to smart contract-based commerce, PYUSD is being positioned for broader use beyond simple transactions.
Alex Chriss, PayPal’s President and CEO, noted the long-standing synergy between the two companies:
“We’ve spent years refining the Coinbase integration to help PayPal users enter the crypto space effortlessly. With PYUSD, our shared vision now focuses on enabling real-world commerce by combining stablecoin utility with PayPal’s payment expertise.”
PayPal Enhances PYUSD’s Appeal With New Incentives
PayPal recently unveiled that users will begin earning a 3.7% annual yield on PYUSD balances held in PayPal and Venmo wallets, starting summer 2025. This move aims to increase long-term holding and utility of the stablecoin, making it more than just a transactional asset.
PayPal has been steadily scaling up its PYUSD ecosystem since its Ethereum-based launch in August 2023. In mid-2024, the company:
-
Expanded PYUSD support to the Solana blockchain
-
Partnered with Anchorage Digital to build a reward system for stablecoin holders
-
Collaborated with MoonPay to enable multi-payment method purchases of PYUSD
PYUSD Market Snapshot: Competing in a Crowded Stablecoin Space
As of now, PYUSD holds a market capitalization of $866 million, with $24.3 million in daily trading volume, according to PRIME. While promising, it still trails significantly behind market leaders:
-
Tether (USDT): ~$146 billion in circulating supply
-
Circle’s USDC: ~$62 billion
-
Total stablecoin market: ~$228 billion (as of April 24, 2025)
This latest zero-fee initiative may help PYUSD carve out a larger share of the stablecoin pie, especially as it begins to establish a presence across both centralized and decentralized platforms.
Coinbase: A Powerful Partner in Driving Adoption
With $439 billion in trading volume in Q4 2024 alone, Coinbase remains one of the most influential crypto exchanges in the U.S. Its involvement ensures PYUSD gains access to a massive user base, improving visibility and on-ramp accessibility.
