PayPal Holdings (ticker PYPL) is introducing a new peer-to-peer payments feature with plans to soon expand support to crypto transactions. The updated payment option will enable users to send Bitcoin, Ethereum, and PayPal’s native PYUSD stablecoin, among other tokens, to "a rapidly growing number of digital wallets," according to an announcement on Monday.
Beyond creating yet another pathway to send and receive digital assets, the new system, called PayPal Links, is particularly relevant for crypto users because the P2P payments will be tax-exempt when transferring funds between known parties on PayPal and its Venmo subsidiary.
"As always, friends-and-family transfers through Venmo and PayPal are exempt from 1099-K reporting," PayPal said. "Users won't receive tax forms for gifts, reimbursements, or splitting expenses, helping ensure that personal payments stay personal."
Crypto lobbyists in the U.S. have long pushed to reduce the tax burden associated with crypto payments, either by carving out de minimis exemptions for low-value transactions under a certain dollar amount, or by other means.
While most crypto transactions — like selling, trading, or using crypto for purchases — typically trigger taxable events, non-commercial transfers like gifts or personal transfers between wallets are not always taxable, depending on jurisdiction and specific circumstances.
"Users won't receive tax forms for gifts, reimbursements, or splitting expenses, helping ensure that personal payments stay personal," PayPal said in its statement.
How it works
PayPal Links will use personalized, one-time links and complement the company’s existing PayPal Me feature, which was designed to quickly discover and share PayPal user profiles without sharing personal banking details. Until today, PayPal Me links required recipients to input the amount they intended to pay.
The expanded PayPal Links system, however, now allows users to specify their payment amount when sending links — along with any notes or emojis — to request funds. This arguably simplifies PayPal’s P2P payment flow and broadens how users can interact. When a link recipient accepts the request, the sender will reportedly "get immediate access to their funds."
Unclaimed links will expire within 10 days, and users will be able to send each other reminders.
The company will roll out PayPal Links first to the U.S. with plans to expand globally, including the UK and other markets, later this month.
According to the announcement, P2P payments and other consumer payments saw 10% year-over-year growth in the second quarter of 2025. Venmo also recorded its highest total payment volume in three years during that period. The company is planning to connect “billions of wallets worldwide.”
PayPal is one of the most engaged fintech companies in the crypto sector since first introducing crypto trading in late 2020. Notably, the company was an early mover in stablecoins, having partnered with Paxos on PYUSD in 2023.
PYUSD, now the 11th-largest stablecoin with a market capitalization of around $1.3 billion, according to The Block’s data, is used as the backbone for PayPal's "Pay with Crypto" feature launched in July. Pay with Crypto enables small businesses to accept dozens of cryptocurrencies.
PYPL shares are trading hands at $67.11 with a $65 billion market cap, according to The Block's price page.
