PayPal Holdings, Inc. (NASDAQ: PYPL) and Coinbase Global, Inc. (NASDAQ: COIN) announced an expansion of their partnership to increase the adoption, distribution, and utilization of the PayPal USD (PYUSD) stablecoin.
This collaboration will provide value for consumers, enterprises, and institutions as they continue to “utilize digital currencies across platforms and borders with the stability of regulated USD-denominated crypto-native assets.”
Alex Chriss, President and CEO, PayPal said:
“For years, we’ve worked with Coinbase to enable a best-in-class integration to provide a simple, familiar way for PayPal users to fund crypto purchases on Coinbase. Our objectives aligned further as we deployed PYUSD in combination with our payments expertise enabling greater commerce applications. We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center and driving further utility and adoption for digital currencies among developers, customers, and other users.”
This partnership will give Coinbase’s millions of customers “direct access to PYUSD while also enabling the thousands of institutions already using crypto increased utility with PYUSD.”
Additional details include:
- 1:1 PYUSD to USD conversions– Coinbase users will now be able to buy, sell, trade PYUSD with no platform fees, while also being able to redeem PYUSD 1:1 for US dollars directly on Coinbase platforms.
- Payments related activities – The two companies are committed to collaborating on a variety of innovations that will help accelerate the adoption and utility of stablecoin based solutions for the purposes of moving or managing money around the world, particularly in commerce.
- DeFi exploration – Coinbase and PayPal agree to explore new use cases for PYUSD in DeFi and onchain platforms.
Brian Armstrong, CEO, Coinbase said:
“We’re excited to be partnering with PayPal. Their more than 430 million consumer and merchant accounts offer an unprecedented opportunity to increase stablecoin adoption globally.”
This agreement expands on the previous work “between the two companies announced in 2021, enabling Coinbase users to use their PayPal accounts for immediate and direct funding of purchases on Coinbase and making withdrawals of fiat currency from Coinbase.”
PayPal USD is issued by Paxos Trust Company, “a fully chartered limited purpose trust company.”
Paxos is licensed to “engage in Virtual Currency Business Activity by the New York State Department of Financial Services.”
Reserves for PayPal USD are said to be “fully backed by U.S. dollar deposits, U.S. Treasuries and similar cash equivalents, and PayPal USD can be bought or sold through PayPal and Venmo at a rate of $1.00 per PayPal USD.”