Can PayPal's Crypto Strategy Give It a Competitive Edge?

PayPal Holdings PYPL has steadily deepened its crypto involvement since 2020, now offering major tokens and stablecoin services. In April 2025, it added Chainlink (LINK) and Solana (SOL) to its PayPal and Venmo platforms, broadening user access to diverse blockchain ecosystems. This expansion reinforces its strategy to become a go-to gateway for tokenized finance.

Central to PayPal’s crypto ambition is PayPal USD (“PYUSD”), launched in August 2023. Recently, PayPal announced that it is expanding PYUSD to Layer-2 blockchains, beginning with Arbitrum. This deployment offers developers a low-cost, high-speed option for PYUSD integration, pairing the stablecoin’s trusted backing with Arbitrum’s efficient transaction capabilities.

In June, PayPal announced plans to expand its stablecoin, PYUSD, to the Stellar blockchain, pending approval from the New York State Department of Financial Services. Stellar is recognized for enabling fast transactions, minimal fees and practical applications in everyday financial use. This move would enhance PYUSD’s payment capabilities by offering a cost-efficient, fast alternative to Ethereum and Solana, enabling broader use in commerce, micro-financing, and global transactions through improved integration and scalability.

A strategic tie up with Coinbase in April 2025 allows fee-free PYUSD purchases, 1:1 redemption, and co exploration of new use cases for PYUSD in DeFi and onchain platforms. This alliance brings PYUSD directly into the exchange ecosystem, enhancing consumer, merchant and institutional adoption, especially as Coinbase waives fees. Earlier, PayPal also rolled out crypto for business accounts, enabling merchants to buy, hold, sell and transfer crypto assets directly via the platform.

How Are Block and Coinbase Global Expanding in This Space?

Block, Inc. XYZ is set to join the S&P 500, marking another milestone in crypto’s push into the financial mainstream. Block has integrated Bitcoin through its Cash App, enabling peer to peer transactions and investing. It invested heavily in BTC treasury holdings and rolled out Bitcoin lending pilot programs. Its Square Crypto initiative focuses on Bitcoin developer grants and Lightning Network adoption to boost Bitcoin’s payment utility.

Coinbase Global COIN, the largest U.S. crypto exchange, offers trading, staking, custodial services and launched its Payments platform, including stablecoin support. It waived fees for PYUSD, expanded institutional services and invests in Layer 2 scaling (like Base) to bolster real world crypto use.

Story Continues## PYPL’s Price Performance, Valuation and Estimates

Shares of PayPal have declined 13.1% year to date, underperforming both the broader industry as well as the S&P 500 Index.

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Image Source: Zacks Investment Research

From a valuation standpoint, PayPal shares are trading cheap, as suggested by the Value Score of A. In terms of forward 12-month P/E, PYPL stock is trading at 13.70X compared with the Zacks Financial Transaction Services industry’s 21.96X.

Zacks Investment Research
Image Source: Zacks Investment Research

PayPal’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for second-quarter and full-year 2025 and full-year 2026 EPS has been revised upward over the past week. The Zacks Consensus Estimate for 2025 EPS suggests 9.46% growth year over year, while the same for 2026 calls for 11.46% growth year over year.

Zacks Investment Research
Image Source: Zacks Investment Research

At present, PayPal carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

Coinbase Global, Inc. (COIN) : Free Stock Analysis Report

Block, Inc. (XYZ) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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