Coinbase is collaborating with PayPal , offering additional benefits for customers using PayPal’s stablecoin, PYUSD, including fee waivers and direct transfers between PYUSD and USD. This is a major benefit for PayPal, as the company has been trying to expand into the cryptocurrency business, launching PYUSD in 2023. PayPal’s integration with Coinbase will allow the company to fulfill its vision of using PYUSD to make transfers worldwide, thus lowering fees and limiting currency exchange rates. Stablecoins are gaining popularity due to their utility as a way to transfer funds quickly, and in many cases, without incurring any fees. PayPal’s PYUSD has lagged behind other stablecoins on the market. This is probably because many crypto traders associate PayPal with the older way of making transactions. PYUSD only shares 1% of the stablecoin market, having a market cap of only $730 million. Tether’s USDT has a market share of about 66%. Circle’s USDC has a market share of about 28%. PayPal announced that its collaboration with Coinbase was not a one-way street, with added benefits for Coinbase, including access to PayPal’s extensive network, which enables wide-reaching, stablecoin-based solutions for businesses and remittances. PayPal said that the collaboration would enable further crypto adoption with PYUSD at the center of innovation and global trade. PYUSD has undergone various changes recently, with PayPal announcing a rewards program offering 3.7% annual rewards in PayPal and Venmo wallets. The new system also allows customers to collect daily rewards and receive monthly payouts. Reward systems are particularly popular during economic crises, such as with shopping vouchers and other types of tokenized value. “We’re demonstrating”, said Alex Chriss, PayPal CEO, “our commitment to an innovative, commerce-ready ecosystem by enabling it for the settlement of cross-border transfers, vendor payments, and in the future for additional payment use cases like payouts and bill pay”. Coinbase, moreover, said the collaboration would explore more on-chain options to increase the utilisation of stablecoins. With Coinbase’s expertise, they could try out other forms of digital payments for PYUSD and engage directly with DeFi ecosystems. Coinbase and PayPal collaborated back in 2021 when the exchange allowed users to buy and withdraw using PayPal. Coinbase seems to be positioning PYUSD as a major player in the stablecoin market, despite the token having only a 1% market share. However, it benefits from a wide-reaching network and a loyal user base.
