PayPal Brings Crypto Into New P2P Payments

PayPal just rolled out PayPal Links, where instead of needing someone’s account details, a user generates a one-time link in the app and shares it through text, email, or whatever channel feels natural. That link works for a single transfer, expires if unclaimed, and lets the sender cancel before it’s picked up. Obviously, that reduces friction and cuts down on mistakes. It’s the kind of small design choice that could push P2P Payments further into daily routines.

PayPal P2P Payments Add Bitcoin, Ethereum, PYUSD Support

PayPal says U.S. users will be able to send Bitcoin, Ethereum, and PYUSD not just to PayPal or Venmo accounts but also directly to outside crypto-compatible wallets. That move clearly blurs the line between traditional Digital Wallets and decentralized systems. For a company with 434 million active users, that’s not just an experiment. It’s an on-ramp for mainstream crypto use at a scale we haven’t seen before.

Personal Transfers Avoid 1099-K Reporting Hassles

Personal transfers, whether in dollars or crypto, won’t trigger 1099-K reporting. P2P Payment may sound technical, but it’s significant. Friends paying each other back for dinner or sending small crypto gifts won’t see paperwork pile up. Of course the IRS still applies capital tax rules when someone sells crypto for profit, but keeping casual transfers outside that system preserves convenience.

Congress passed the GENIUS Act this summer, giving the U.S. its first real framework for stablecoins. That required reserves, audits, and clear consumer protections. Obviously a player like PayPal waited for that kind of legal clarity before leaning into stablecoin payments. Two more bills are pending: the CLARITY Act and the CBDC Anti-Surveillance State Act. The U.S. market finally looks like a place where crypto gains can be pursued without guessing at the rules. 

Global P2P Payments Market Shows Rapid Growth

The global P2P Payments market was worth $3.2 trillion in 2023 and is still growing at more than 15 percent annually. PayPal holds around 30 percent of that slice. Meanwhile crypto payments are expected to grow to $6 billion by 2035, with nearly half of surveyed merchants already accepting some form of digital currency. Clearly that’s not a fringe use case anymore. When you add PYUSD’s recovery to a $1.35 billion market cap and daily volumes near $100 million, you see why this integration matters.

International rollout is already mapped. The U.K. and Italy get PayPal Links later this month, backed by local regulatory approvals and PayPal’s earlier acquisition of iZettle for in-store reach. And it’s not just Europe. The PayPal World ecosystem ties into India’s UPI, Mercado Pago in Latin America, and Tenpay in China. That’s close to two billion users who could potentially connect through Digital Wallets under one umbrella. Obviously that kind of interoperability has consequences for remittances and cross-border trade.

Security Measures Ensure Safe PayPal P2P Payments

Links are encrypted, fraud detection runs on AI, and crypto transfers still go through KYC and AML checks. That balance is what regulators want to see. And from a user perspective, clearly that’s what builds trust.

Looking a step further, the crypto integration also ties into broader financial planning questions. How will loss carry rules apply when users trade in and out of assets inside PayPal’s environment? Will fiscal 2026 reporting cycles bring more clarity on crypto gains taxation, or will we still be dealing with piecemeal rules? Those are open questions, but they’re now on the table because PayPal has put real volume behind them.

So what does this all add up to? PayPal isn’t just layering crypto onto existing Digital Wallets. It’s designing a bridge between regulated finance and decentralized assets, at scale, with user experience front and center. Obviously competitors will respond, but right now, PayPal has first-mover advantage.

This is a fast-moving space. Anyone considering exposure to these shifts should look closely at the data and regulatory direction before acting. Always invest based on your own research.