The move comes two days after Circle, a stablecoin partner of Coinbase, debuted a payment network challenging PayPal's remittance business.

Coinbase, the largest publicly traded cryptocurrency exchange, is waiving fees on transactions connected to PayPal's stablecoin and allowing its users to redeem the token directly for U.S. dollars, a major milestone for PayPal as the company doubles down on crypto payments.

PayPal Holdings Inc. plans to offer rewards to its users on their holdings of its stablecoin, in a bid to encourage more usage of the digital token in an increasingly competitive market.