PayPal Integrates Crypto Into P2P Payments, Enabling BTC, ETH and Others

The centerpiece of the launch is PayPal Links, a new US-feature that allows users to create single-use personalized payment links. Users enter payment details, generate a link, and share it via text, chat, or email. The recipient can click the link to complete the payment, and the link will expire after ten days if unused, with the sender able to cancel unclaimed links. The tool will first be available in the United States, with plans to roll out to the United Kingdom, Italy, and other markets later this month.

Another major development is the integration of cryptocurrency and stablecoin support in PayPal’s P2P flows. Supported assets include Bitcoin, Ethereum, and PYUSD, which can be sent to PayPal, Venmo, and certain compatible digital wallets. PYUSD is issued by Paxos Trust Company with full backing via U.S. dollar deposits, Treasuries, and similar cash equivalents. The expansion across markets will require regulatory approvals and may be subject to delays in some jurisdictions. PayPal also reports growth in consumer payment volumes driven in part by enhanced P2P and improved visibility of its services.

PayPal also clarified the regulatory and tax treatment of personal payments. Transfers between friends and family through PayPal or Venmo remain exempt from U.S. tax reporting under IRS rules for Form 1099-K, provided they represent personal transactions such as gifts, reimbursements, or expense splits. This ensures that day-to-day use of the service does not carry unintended tax consequences.

The company highlighted that consumer payment volumes grew by 10 percent year over year in its second quarter, attributing the increase in part to improved user experience and greater visibility of its products. Venmo, in particular, recorded its strongest total payment volume growth in three years.

These initiatives also build on PayPal World, a platform aimed at linking major digital payment systems and wallets around the world. With this infrastructure, PayPal and Venmo plan to enable interoperability across “billions” of wallets, a move designed to streamline cross-border payments and make international remittances more efficient.

Diego Scotti, General Manager of PayPal’s Consumer Group, emphasized the significance of the company’s latest launch. "For 25 years, PayPal has revolutionized how money moves between people. Now, we're taking the next major step," he said. Scotti highlighted the seamless nature of the new tools, explaining, "Whether you're texting, messaging, or emailing, now your money follows your conversations. Combined with PayPal World, it's an unbeatable value proposition, showing up where people connect, making it effortless to pay your friends and family, no matter where they are or what app they're using."

Industry observers point out that the announcement reflects intensifying competition in the payments sector. With fintech startups, technology firms, and social media companies increasingly embedding financial services into their platforms, PayPal’s expansion of its P2P offerings demonstrates an effort to protect its position while capturing new opportunities.

The integration of stablecoins and cryptocurrencies may prove especially significant in emerging markets, where remittance flows are vital and local currency volatility drives demand for dollar-backed alternatives. By partnering with a regulated issuer such as Paxos, PayPal is also addressing compliance considerations and positioning itself as a bridge between traditional finance and digital assets.

The broader implications of these developments remain substantial. For users without access to traditional bank accounts, the ability to send or receive money through digital wallets could improve accessibility and financial inclusion. At the same time, global regulators are paying closer attention to peer-to-peer transfers, stablecoins, and cross-border digital payments, meaning that oversight and compliance obligations are likely to increase as adoption grows.

Currency conversion costs and transparency of fees will be critical factors in determining how consumers experience these services, particularly in international transactions. The speed of adoption will also depend on how quickly PayPal rolls out the new tools outside the United States and how seamlessly local wallets and financial apps integrate with its systems.

PayPal’s launch of PayPal Links, the integration of cryptocurrencies and PYUSD stablecoin and the expansion of interoperability through PayPal World mark a significant moment in the evolution of digital payments. By combining traditional peer-to-peer tools with digital asset functionality, the company is laying claim to the next stage of financial interaction, one defined by flexibility, seamless connectivity, and global reach.