Coinbase has announced the removal of fees for purchasing PayPal's stablecoin, PYUSD, as part of a strategy to increase its usage. The companies are collaborating on "stablecoin-based solutions" in the payment and commerce sectors, exploring PYUSD's potential in decentralized finance.
Since its 2023 launch, PYUSD has lagged in the market, holding a market cap of approximately $730 million, accounting for less than 1% of the stablecoin market share. In contrast, Tether's USDT and Circle's USDC dominate with 66.5% and 28.3% shares, respectively.
PayPal and Coinbase aim to enhance the global transfer and management of funds using stablecoins, particularly in commerce. This move comes amid increasing competition in the stablecoin arena, as the U.S. Congress is expected to pass legislation focusing on stablecoins.
Coinbase CEO Brian Armstrong highlighted PayPal's extensive network as an opportunity to boost stablecoin adoption globally. Coinbase is diversifying its revenue sources beyond cryptocurrency trading, sharing 50% of USDC revenue with Circle, and has ambitions for USDC to become the top stablecoin.
Coinbase is also integrating crypto payments across its product suite and enhancing its Base network for developing on-chain applications. Users can now directly convert PYUSD to USD on the Coinbase platform, similar to USDC functionalities.
