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PayPal Holdings and Coinbase have announced an expansion of their existing partnership to boost the adoption and utility of PayPal's USD-pegged stablecoin, PYUSD.
The collaboration, revealed on 24 April, aims to increase the distribution and utilisation of PYUSD across platforms, with both companies pledging to explore new payment applications for the digital currency.
Under the expanded partnership, Coinbase will provide fee-free purchases of PYUSD and enable direct 1:1 redemption for US dollars on its platforms. The arrangement gives Coinbase's user base direct access to PYUSD while offering institutions already using cryptocurrency increased utility with PayPal's stablecoin.
"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," said Alex Chriss, President and CEO of PayPal. "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."
The agreement builds upon previous integrations between the two companies that began in 2021, when PayPal accounts were first enabled for funding purchases and withdrawals on Coinbase.
Beyond the fee-free transactions and simplified redemption process, the partnership will focus on collaborative innovation around stablecoin-based payment solutions for cross-border transactions and commerce applications. Both companies have also committed to exploring new use cases for PYUSD in decentralised finance (DeFi) and on-chain platforms.
Brian Armstrong, CEO of Coinbase, commented: "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."
PayPal USD is issued by Paxos Trust Company, a chartered limited purpose trust company licensed for virtual currency business by the New York State Department of Financial Services. The stablecoin's reserves are fully backed by US dollar deposits, US Treasuries, and similar cash equivalents, with PYUSD designed to maintain a stable value of $1.00 per token.
