Coinbase (COIN) Introduces Free PayPal PYUSD Conversion as Stablecoin Competition Heats Up

Coinbase Launches Free Conversion for PayPal's PYUSD Amid Intensifying Stablecoin Competition

The partnership is another indicator that stablecoin issuers are looking to increase their market share amid tightening regulations in the US.

Christian Sandor | Edited by Sheldon Rebeck on April 24, 2025, 4:02 PM

Key points:

• Coinbase will offer free conversion between US dollars and PayPal's PYUSD stablecoin for both retail and institutional clients.
• Coinbase also plans to expand its infrastructure support for stablecoin payments to key PayPal merchant partners.
• Stablecoins, which are presented as a cheaper and faster alternative to traditional payment systems, are experiencing rapid growth and are expected to reach a market capitalization of $2 trillion by 2028.

Cryptocurrency exchange Coinbase (COIN) said it will begin offering free conversions between PayPal's dollar-pegged stablecoin PYUSD and U.S. currency to speed up the transition to on-chain payments.

The move, available to both retail and institutional users, is part of a partnership aimed at promoting PYUSD as a settlement currency. Coinbase also intends to use its platform to offer PYUSD to PayPal’s wider network of merchant partners, which could make it easier for stablecoins to be used in everyday transactions.

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Competition among stablecoins intensifies

Stablecoins are digital tokens pegged to traditional currencies, primarily the dollar, and are one of the fastest-growing sectors in cryptocurrency. They are positioned as a faster, cheaper alternative to traditional payment systems and are increasingly in demand for cross-border payments. Standard Chartered predicts that the sector will grow to $2 trillion by 2028 from the current $220 billion.

As stablecoin regulation in the U.S. evolves, competition between issuers is intensifying, while banks and traditional payment companies are also starting to take an interest in the market. Binance, the largest crypto exchange, and Circle, the issuer of the second-largest dollar-backed stablecoin, have already teamed up to use Circle’s USDC as a trading pair and payment method. Circle unveiled its remittance network this week.

Market leader Tether, the issuer of $140 billion USDT, is considering issuing a stablecoin aimed at US users.

Meanwhile, PayPal, whose stablecoin launched in 2023 and has reached $860 million, recently offered PYUSD annualized yield of 3.7% for US token holders to attract more users.

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