PayPal’s stablecoin, PayPal USD (PYUSD), has reached a significant milestone, surpassing $1 billion in total market capitalization, according to CoinMarketCap.
PayPal’s stablecoin, PayPal USD (PYUSD), has reached a significant milestone, surpassing $1 billion in total market capitalization, according to CoinMarketCap. Launched in 2023, PYUSD is pegged 1:1 to the US dollar and is issued by Paxos Trust Company, a US-regulated crypto custodian. This achievement underscores the growing interest in regulated, dollar-backed digital currencies.
PYUSD enters a competitive landscape dominated by other stablecoins like Tether’s USDT and Circle’s USD Coin (USDC). According to CoinMarketCap, USDT and USDC boast market capitalizations of nearly $118 billion and $35 billion, respectively. These figures dwarf PYUSD’s $1 billion market cap, indicating the challenges PayPal faces in catching up with these established giants.
However, PayPal's president and CEO, Dan Schulman, emphasized the crucial role of stablecoins in the evolving digital currency ecosystem. “The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” Schulman stated in 2023, highlighting the demand for a reliable bridge between traditional and digital finance.
As an ERC-20 token compatible with Ethereum, PYUSD is the only stablecoin integrated into PayPal’s payment systems. This integration makes it accessible to a vast and expanding network of developers, wallets, and Web3 applications. PayPal has designed PYUSD for seamless onboarding by cryptocurrency exchanges, further expanding its utility in the digital economy.
In May, PayPal launched PYUSD on the Solana blockchain. This move, in collaboration with Crypto.com, Phantom, and Paxos, was aimed at making it easier for users to access the Solana network. Additionally, PayPal has partnered with Web3 infrastructure provider MoonPay, allowing users to purchase cryptocurrencies using their PayPal accounts. This partnership was further extended to enable on-ramping to the crypto betting platform Polymarket in July.
PayPal’s efforts to integrate PYUSD into the broader crypto ecosystem reflect its ambition to position the stablecoin as a key player in the market. However, the company faces stiff competition from other platforms offering similar incentives. For instance, Coinbase, which has an institutional custody arm, also encourages users to hold stablecoins on its platform. Coinbase currently offers an annual percentage yield of approximately 5.2% on USDC, and it holds an equity stake in Circle, the issuer of USDC.
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