PayPal’s “Pay with Crypto” feature, officially unveiled on July 28, 2025, represents a significant step in bridging digital assets and mainstream commerce. Designed for U.S.-based merchants (excluding New York), this capability enables retailers to accept more than 100 different cryptocurrencies—ranging from Bitcoin and Ethereum to stablecoins like USDT, USDC, as well as XRP, BNB, and Solana. Shoppers can connect wallets such as Coinbase, MetaMask, OKX, Kraken, Binance, Phantom, or Exodus at checkout. Behind the scenes, PayPal immediately converts the cryptocurrency payment into either U.S. dollars or its own stablecoin, PYUSD, so that merchants receive fiat without exposure to crypto volatility.
PayPal is positioning this rollout as a solution to one of global trade’s biggest frictions: high cross-border transaction fees and slow settlement times. By offering a promotional transaction rate of just 0.99 percent—a rate it says is up to 90% lower than international credit card fees—PayPal intends to attract small- and medium-sized businesses and freelancers who operate across borders. The funds settle in seconds, and merchants holding balances in PYUSD can earn up to a 4 percent yield, reinforcing stablecoin utility while enhancing liquidity.
Behind the rollout lies PayPal’s strategic push into the $3 trillion-plus global crypto ecosystem and its ambition to expand PYUSD adoption. PayPal already announced a global wallet-to-wallet network called “PayPal World,” linking several major digital wallets. “Pay with Crypto” continues that vision, allowing consumers to pay with crypto and merchants to receive funds efficiently thanks to seamless conversion into fiat or PYUSD.
While the feature is packed with convenience, it is not without limitations. Consumers are restricted to using a single cryptocurrency per transaction, and once a payment is made, the token is instantly converted—meaning buyers cannot opt to retain their original crypto. Furthermore, though PayPal powers this service, it relies on blockchain networks and custody arrangements—users bear responsibility for safeguarding their private keys. PYUSD and other digital assets are not insured by FDIC or SIPC, and the entire ecosystem remains subject to operational and regulatory uncertainties. Notably, the service is pending approval from the New York State Department of Financial Services (NYDFS) before being usable by New York-based merchants.
Industry responses have been cautiously observant. Experts generally agree that PayPal’s integration could unlock faster, cheaper cross-border commerce for businesses that have traditionally suffered from high fees and slow settlements. Still, critics raise valid concerns: some point to PayPal’s historic reputation for freezing accounts as a potential trust hurdle for crypto-savvy users. Others emphasize that relinquishing direct control of tokens at checkout could undermine the very identity of cryptocurrency ownership and decentralization. On the regulatory front, despite the passing of the GENIUS Act in Congress, legal frameworks for stablecoins remain nascent and evolving—raising questions about future oversight, redemption rights, and disclosure norms for PYUSD and similar assets.
In essence, “Pay with Crypto” flows with PayPal’s long-term narrative: reducing friction, broadening payment choice, and fostering global growth through digital currencies. Yet success will hinge on users’ willingness to trust PayPal with crypto flows, regulatory clarity for stablecoins, and the company’s ability to deliver transparency and control in a system built on digital flexibility.
