Coinbase & PayPal: Reviving the Promise of Stablecoin Payments

Edition: April 28, 2025

The Foundation of a Renewed Alliance

In a development that may shape the future of digital finance, Coinbase and PayPal have announced a new phase in their ongoing collaboration—one that centers on stablecoin infrastructure, payments utility, and global commerce integration. The announcement isn’t coming out of nowhere: the relationship between these two fintech giants dates back to 2021, when they first enabled PayPal users to fund crypto purchases on Coinbase.

| “For years, we’ve worked with Coinbase to provide a simple, familiar way for PayPal users to fund crypto purchases.” | — Alex Chriss, CEO of PayPal

Now, in 2025, the partnership deepens—not around speculation or hype—but around the real-world deployment of PayPal USD (PYUSD), a USD-backed stablecoin launched in 2023 and issued by Paxos Trust Company.

A Glimpse at the Players

PayPal has long been at the forefront of digital commerce innovation. With over 430 million consumer and merchant accounts worldwide, its payments infrastructure spans almost every corner of online and mobile commerce. Over the past two years, it has leaned further into blockchain, launching PYUSD with the stated aim of bringing stability and compliance to the crypto payments landscape.

Coinbase, meanwhile, has evolved beyond a crypto exchange. With ambitions to power the “onchain economy,” it now serves consumers, developers, and institutions with staking, custody, global remittance tools, and a growing onchain ecosystem built on its Ethereum-compatible network, Base.

The Current Expansion: What’s Changing

At the heart of the latest partnership is utility. Coinbase users can now buy, sell, and redeem PYUSD directly on-platform with no fees. Merchants and institutions are being positioned to settle transactions in PYUSD, allowing it to function as a payment vehicle—not just a store of value or trading pair.

Beyond that, both companies are committing to explore:

• DeFi integrations for PYUSD in decentralized applications

• Commerce-focused use cases, including cross-border payments

• Enhanced developer support for stablecoin payment rails

| “This combination—connecting the consumer bases of PayPal and Coinbase, and enabling direct settlement—creates a powerful payments framework.” | — Jose Fernandez da Ponte, SVP, Blockchain & Digital Currencies, PayPal

Reading the Climate: Regulation, Momentum, and Market Share

This announcement also lands at a time of notable momentum for crypto regulation in the U.S. Both chambers of Congress have advanced legislation to create a stablecoin regulatory framework, with final passage expected later this year. And in a symbolic move, the current administration recently signed an executive order establishing a Strategic Bitcoin Reserve, marking the first time the federal government has formally recognized a digital asset as part of its holdings.

| “The significance... is mainly symbolic, but marks the first time Bitcoin is formally recognized as a reserve asset of the United States government.” | — Andrew O’Neill, Managing Director of Digital Assets, S&P Global

Stablecoin Ecosystem: A Strategic Race

PYUSD is not without competition. The stablecoin landscape is currently dominated by Tether (USDT) and Circle’s USDC, which account for over 90% of the market share combined. Coinbase itself holds a unique position in this race—it shares revenue with Circle through USDC, yet is now offering PYUSD the same zero-fee treatment, a sign of its intent to diversify stablecoin utility across use cases.

For PayPal, this integration could be the key to finally giving PYUSD the traction it lacked at launch. With only $872 million in market cap, it controls less than 1% of the stablecoin market—but with Coinbase’s infrastructure and institutional reach, that could change.

What Comes Next: A Stablecoin-Enabled Payments Infrastructure

This isn’t just about Coinbase and PayPal. It’s about a broader shift in how digital money operates:

• Merchants may soon settle in stablecoins, bypassing slower card-based rails.

• Businesses with global supplier networks may find value in real-time, FX-free stablecoin settlements.

• Consumers are being incentivized, too—PayPal has introduced a 3.7% annual reward on PYUSD balances, paid in more PYUSD.

From a Compaytence lens, this move speaks directly to the future of B2B payments, supplier financing, and cross-border liquidity. Whether paired with platforms like Trevipay for net terms or integrated into wallet infrastructures, stablecoins are evolving into usable, programmable money—not just a financial asset class.

Closing Perspective from Compaytence

This Coinbase–PayPal alliance underscores what we’ve long believed at Compaytence: the infrastructure of global payments is changing, and stablecoins are no longer a fringe experiment—they’re a serious alternative for both businesses and platforms.

What matters now isn’t just technology—it’s adoption, regulation, and alignment with real economic use. And in those areas, this partnership is delivering.

| “This is a blueprint for how digital assets will flow across borders: not just fast, but embedded in how commerce works.” | — Compaytence Global Payments