From Nasdaq

May 4, 2025 6:00 am:

Coinbase and PayPal have joined forces to enhance the accessibility and usability of PayPal’s stablecoin, PayPal USD. This collaboration could give PayPal an advantage in the competitive stablecoin market. Stablecoins are cryptocurrencies pegged to real-world assets like the U.S. dollar, offering a less volatile payment option on the blockchain.

The partnership between Coinbase and PayPal aims to boost the adoption of PayPal USD, making it easier for users to buy and convert the stablecoin fee-free. Additionally, the companies plan to explore opportunities for integrating PYUSD into decentralized finance (DeFi) applications, potentially revolutionizing how people manage their finances without traditional intermediaries like banks.

PayPal’s entrance into the stablecoin market with PYUSD has the potential to disrupt current leaders like USDC and Tether. The stablecoin market saw significant growth in 2024, with transfer volume surpassing that of Visa and Mastercard combined. While stablecoins offer advantages like fast and low-cost transactions, they also pose risks and limitations compared to other cryptocurrencies like Bitcoin and Ethereum.

PayPal’s PYUSD stablecoin offers a 3.7% yield on holdings, but investors should be aware that stablecoins lack FDIC protection and may not appreciate in value like traditional investments. Regulatory uncertainties and consumer protection concerns remain key challenges in the stablecoin market. The Coinbase-PayPal deal could have far-reaching implications for the future of cryptocurrency adoption and mainstream use.

Investors considering PayPal stock should weigh the potential risks and rewards, as the stablecoin market evolves and regulatory frameworks develop. While PayPal’s partnership with Coinbase could strengthen its position in the stablecoin race, it’s essential to conduct thorough research and consider all factors before making investment decisions.

Read more at Nasdaq: Here’s How the Coinbase-PayPal Stablecoin Deal Could Rock Crypto