PayPal Integrates BTC, ETH, and Stablecoin PYUSD Into P2P Transfers

Markets 2025-09-16 16:22

PayPal is taking a major step into digital assets by integrating Bitcoin (BTC), Ethereum (ETH), and its U.S. dollar–backed stablecoin, PayPal USD (PYUSD), into its peer-to-peer (P2P) payment system. The rollout begins in the United States and will expand internationally, including to the U.K. and Italy, later this year.

What Paypal Changes Starting Today

Users can now send and receive BTC, ETH, and PYUSD natively within PayPal’s P2P payments. Transfers work seamlessly between PayPal, Venmo, and external compatible wallets, bringing the experience closer to wallet-to-wallet crypto transfers.

To simplify money collection, PayPal also introduced “PayPal Links.” Each user can generate a unique payment link shareable via SMS, email, or chat. This feature debuts in the U.S. first, with international expansion planned.

Importantly, the IRS has clarified that personal payments between friends and family made through PayPal or Venmo do not trigger 1099-K tax reporting, avoiding confusion and smoothing adoption.

PYUSD at the Center of Interoperability

PYUSD, PayPal’s stablecoin pegged to the U.S. dollar, now has a market cap near $1.3 billion, strengthening its liquidity for mass payments. Coinbase recently removed fees on PYUSD transactions and enabled direct redemptions in U.S. dollars, boosting its utility in global payment rails.

This strategy is part of “PayPal World”, the company’s interoperability push connecting payment systems and wallets worldwide. With over 430 million active accounts, PayPal’s network effect could accelerate adoption across merchants and users alike.

PayPal is also reviving its “pay with crypto” initiative for merchants, enabling instant settlement in stablecoins or fiat, while supporting more assets and wallets. The integration between merchant checkout, P2P payments, and PYUSD shows PayPal’s plan to streamline and standardize payment rails.

Rising Competition in Crypto P2P

PayPal faces growing competition. Kraken recently launched “Krak”, a crypto-native P2P payments app supporting hundreds of digital assets with near-instant global transfers. Meanwhile, X (formerly Twitter) is expanding its payments business in the U.S. via banking partnerships and debit cards.

The race to become the default daily wallet is heating up, with each player pushing a unique value proposition: PayPal with stable, regulated rails, Kraken with open crypto integration, and X with its super-app ambitions.

Ultimately, the real utility will be measured in cross-border remittances. According to World Bank data, remittance costs remain high in many regions. Stablecoin-based payment rails could significantly reduce costs and increase financial inclusion.

Still, macroeconomic debates continue. The Bank for International Settlements (BIS) warns that stablecoins have yet to meet the full criteria of “good money,” citing governance and reserve transparency risks.

For now, PayPal’s move represents one of the boldest steps yet by a mainstream fintech giant to bring crypto into everyday payments. If you are looking for a P2P crypto exchange, check THIS out.

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This content is for informational purposes only and does not constitute investment advice.

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