Braintree with Paypal not working with Multi Website and Multi Currency setup - Sandbox Environment

Question

I am experiencing an issue with PayPal used with Braintree Sandbox. I have multi website setup. US and UK website. UK website is working fine and accepting the payment in GBP using PayPal.

I am using PayPal Sandbox to pay for the Order.

However when paying using PayPal for US website using USD as currency it does not allow me to pay and returns the following.

Status : Processor Declined Processor Response Text : Declined (2046)

Anyone has solution to this issue?

The integration is headless integration. Please let me know if any more info is required to get more context on the issue.

Here is things I have already tried.

1. Created new merchant account with USD as the currency in the braintree sandbox account.
2. Setup the merchant account for US website to new USD merchant account.
3. Merchant country is set to "United States" in Magento for US website.
4. PayPal account used to pay for the Order is US Account.
5. I have tried by creating new PayPal account with US address, but it still did not work.

Expected Result : It should allow to Pay using USD currency through PayPal sandbox.