I have been trying to unify my finances so that I can easily transfer money around. The challenge is that Crypto.com DeFi revolves around Cronos, Coinbase revolves around Base, and PayPal is not on either. Part of why I need this is that I don't like transferring between exchanges in crypto as it can be confusing in figuring out cost basis for taxes. Therefore, I prefer to transfer stablecoins between exchanges as the cost basis is easily $1. I've been using USDC in different variations, which isn't as smooth as I would like. In a world of almost instant payment settlement, it hasn't been as instant.
Banks Still Don't Like Crypto
It's always iffy to buy crypto with my debit card. And it is frustrating to use ACH with its delays to post and the holds on purchased crypto until the payment clears. Coinbase and PayPal seem to have less restrictions on transfers via debit card, which is why they are useful for me. Crypto.com has historically worked with my debit card in small amounts. Larger amounts trigger a fraud alert, which I then have to call customer service to clear up.
I end up having to go through transfers, bridging, and swaps to transfer value between my wallets as a result of the disparate DeFi blockchains.
Why PayPal?
Despite their reputation for cutting people off, PayPal has worked well with my bank for instant transfers both in and out. I have a theory that most people who have had their PayPal shut off have tended to use it for business transactions, which introduces risk. I mostly use my PayPal for paying things. I rarely send or receive from other people.
More to the point, I have both PayPal Credit and the PayPal Cashback World Mastercard that I need to pay regularly. I am finding it faster and more convenient to send PYUSD to PayPal to pay those bills.
Crypto.com and Coinbase Problems
I can't use Crypto.com as I would like as they don't have options for instant bank transfers, only slow ones or limited ones. Once the money is on Crypto.com, I can convert to crypto for transfer to the Onchain wallet, cashing out to the debit card as needed.
Coinbase has instant transfers, but they don't take direct deposit, meaning I'm stuck having to maintain a bank checking account. Coinbase Wallet, their self-custody option, does offer direct deposit, which gets instantly converted to USDC. But that just locks me in to Base.
I know. I know I'm a hot crypto mess.
USDC on Different Chains
USDC on Ethereum
Forget about it. High fees. Slow transfers.
PayPal doesn't take USDC on Ethereum.
USDC on Base
I can transfer to Crypto.com but it takes 20 minutes for it to be processed and be available. No fees. If I send direct to the exchange, I can withdraw to the Onchain wallet for my DeFi adventures. If I send directly to Onchain wallet, I need to swap USDC between Base and Cronos.
From Crypto.com to Coinbase, it's faster. The payment posts and is instantly available.
PayPal doesn't take USDC on Base.
USDC on Stellar
USDC on Stellar is fast and almost instantly available between Coinbase and Crypto.com, both ways. Stellar also has negligible fees.
PayPal doesn't take USDC on Stellar.
USDC on Solana
USDC on Solana is also almost instantly available transferring between Coinbase and Crypto.com for almost nothing in fees.
PayPal doesn't take USDC on Solana.
Reluctant Acceptance of Solana
I have been reluctant to embrace Solana. It has a lot going for it. But it doesn't connect to my DeFi setup on Cronos. And given its history, I hesitate to trust it to keep running.
However, PayPal's stablecoin, PYUSD does operate on Solana. And both Coinbase and Crypto.com accept PYUSD without hiccups. Given the convenience of instant availability on PYUSD purchases on both Coinbase and PayPal, it seems the fastest way to onramp larger amounts for transfer into my Cronos DeFi.
I am now considering a DeFi setup on Solana to unify my financial shenanigans. Most of what I do is buy crypto and set it up as collateral for DeFi loans. In this way, I don't have sell. I can borrow against my cryptos when needed. My long term goal is to move my credit card debt to DeFi loans to pay it off faster.
The only drawback is that it takes time to build up enough collateral for meaningful loans. Building up collateral too aggressively would mean that I'm not paying the credit cards as much. And most DeFi lending is overcollateralized, meaning each $1 of value has roughly $0.65 to $0.70 of credit offered. With small deposits and almost half of that becoming credit, it would be some time before Solana DeFi builds up useful credit.
So there you have it. PYUSD seemed like one of the most useless stablecoins when it launched. Who would use it? As it turns out, I can use it, at least in my specific circumstances. I have not been able to extract myself from traditional finance. My world still requires fiat, for which I need fast, reliable onramps and offramps for my crypto. And it turns out that PayPal can be useful as a bank.
It's possible that as soon as traditional banks jump on to the stablecoin bandwagon that all of these transfer gymnastics will be resolved. Transferring to whitelisted wallets would be easier than sending to exchanges via bank transfers or debit card payments. Banks would be crypto onramps. They can't object if you transfer your stablecoins to your own wallet. But we're still not there. In the meantime, transfer gymnastics are still a thing.