PayPal launched its “Pay with Crypto” feature enabling U.S. merchants to accept payments in over 100 cryptocurrencies, including Bitcoin, Ethereum, USDT, XRP, BNB, Solana, and USDC. This service supports major crypto wallets like Coinbase, MetaMask, Binance, OKX, Kraken, Phantom, and Exodus, with plans to expand further. It allows near-instant conversion of crypto to fiat or PayPal’s stablecoin (PYUSD), shielding merchants from volatility while offering a seamless checkout experience.
The feature reduces international transaction fees by up to 90% compared to traditional credit card processing, charging a promotional 0.99% fee until July 31, 2026, then 1.5% thereafter. This aligns with PayPal’s broader “PayPal World” initiative to integrate global digital wallets and enhance cross-border commerce, tapping into a $3+ trillion crypto market and over 650 million crypto users.
Merchants can also earn a 4% yield on PYUSD balances held in PayPal accounts. The service is set to roll out to U.S. merchants in the coming weeks, with global expansion pending regulatory approvals. Crypto payments cut international transaction fees by up to 90% compared to traditional credit card processing (typically 3-4%). PayPal charges a promotional 0.99% fee until July 31, 2026, then 1.5%, significantly cheaper than cross-border bank or card fees.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
Crypto transactions settle near-instantly, unlike traditional systems that can take days for cross-border transfers, improving cash flow for merchants and buyers. By converting cryptocurrencies to fiat or PYUSD at the point of sale, the feature minimizes expensive foreign exchange fees and shields merchants from crypto volatility.
PayPal supports over 100 cryptocurrencies and major wallets (e.g., Coinbase, MetaMask), enabling seamless payments across borders without reliance on banks or SWIFT networks, which often involve intermediaries and delays. Decentralized Infrastructure leverages blockchain’s decentralized rails, bypassing traditional financial gatekeepers like banks or payment processors, which can impose restrictions or high costs in certain regions.
Financial inclusion enables unbanked or underbanked populations with crypto wallets to participate in global commerce, reducing dependence on traditional banking infrastructure. Merchants holding PYUSD balances earn a 4% yield, providing an additional financial incentive not typically offered by traditional systems. By integrating crypto rails, PayPal’s feature streamlines cross-border payments, lowers costs, and enhances efficiency, challenging the dominance of legacy financial systems while catering to a growing crypto user base of over 650 million globally.
The U.S. has enacted the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, establishing a federal regulatory framework for stablecoins. It mandates that issuers be registered as “permitted payment stablecoin issuers” (PPSIs), which can be subsidiaries of insured depository institutions, uninsured depository institutions, or nonbank entities. Stablecoins must be backed 1:1 by liquid assets like U.S. currency, Treasury bills (?93 days maturity), or demand deposits at insured institutions. Monthly disclosures and audits by registered accounting firms are required.
Issuers must adhere to Bank Secrecy Act requirements, including anti-money laundering (AML) programs, customer identification, and sanctions compliance. Large issuers (market cap >$10 billion) face federal oversight by the Federal Reserve and OCC, while smaller issuers can opt for state regimes if “substantially similar” to federal standards. PayPal’s PYUSD stablecoin must comply with these rules, ensuring reserves are fully backed and audited. The GENIUS Act’s clarity enables PayPal to offer PYUSD for cross-border payments with reduced regulatory risk, facilitating lower-cost transactions (0.99% fee until July 2026) compared to traditional systems (3-4% credit card fees).
Critics, like Sen. Elizabeth Warren, argue the GENIUS Act lacks robust AML protections and allows non-financial entities to issue stablecoins without bank-level scrutiny, raising concerns about money laundering and consumer protection. The Act also prohibits yield-bearing stablecoins for consumers, limiting PayPal’s ability to offer interest on PYUSD directly to users, though merchants can earn 4% yield on PYUSD balances.
PYUSD’s delisting in the EU restricts its use for cross-border payments in the region, forcing PayPal to rely on compliant stablecoins or fiat conversions. However, MiCA’s interoperability focus supports PayPal’s goal of seamless cross-border transactions by aligning stablecoin standards across EU member states. Vague deadlines and ongoing rule-drafting may delay PayPal’s ability to fully integrate PYUSD for UK cross-border payments. However, the UK’s exploration of overseas stablecoins could allow PayPal to leverage compliant USD-pegged stablecoins, reducing reliance on traditional payment rails.
Stablecoin regulations in 2025, particularly the U.S. GENIUS Act and EU’s MiCA, provide a structured framework that enhances PayPal’s “Pay with Crypto” feature by ensuring reserve stability and compliance, enabling cheaper and faster cross-border payments. While reducing reliance on traditional systems, challenges like EU delistings and AML scrutiny require PayPal to adapt by using compliant stablecoins or focusing on regions with favorable regulations. This regulatory clarity strengthens PayPal’s position to challenge legacy financial systems, but global interoperability remains a hurdle due to varying standards