According to CoinMarketCap data, PayPal Stablecoin PYUSD, the US dollar-pegged stablecoin of PayPal, has surpassed $1 billion in market capitalization.
Circle’s USDC and Tether’s USDT are PYUSD’s competitors. Paypal stablecoin, PYUSD, introduced in 2023, is issued by Paxos Trust Company, a US-regulated crypto custodian, and is supported by US dollars 1:1. It competes with other regulated, dollar-backed stablecoins, including Circle Internet Financial’s USD Coin.
Paypal Stablecoin Rallies at $1B Market Cap
In a 2023 statement, Dan Schulman, the president and CEO of PayPal, stated that the transition to digital currencies necessitates a stable instrument that is both digitally native and readily compatible with fiat currency, such as the US dollar.
The sole stablecoin supported on PayPal’s payment channels is PYUSD, an ERC-20 token compatible with Ethereum. According to PayPal, it is intended to be “easily onboarded by cryptocurrency exchanges” and “available to an already large and growing community of external developers, wallets, and Web3 applications.”
PayPal has been collaborating with Anchorage Digital to establish a rewards program for clients who store PayPal USD stablecoins with the crypto custodian as part of its efforts to increase the accessibility of PYUSD.
In May, it partnered with Phantom, Paxos, and Crypto.com to on-ramp users onto the blockchain network when it launched PYUSD on Solana.
Additionally, it collaborated with MoonPay, a Web3 infrastructure provider, to facilitate the purchase of cryptocurrency through a PayPal account. In July, that partnership was expanded to include the on-ramp of consumers to the crypto betting platform Polymarket.
Coinbase, which also operates an institutional custody subsidiary, incentivizes users to maintain stablecoins on its platform. It currently provides an annual percentage yield of approximately 5.2% of USDC. Coinbase holds an equity stake in Circle.
Despite its recent accomplishments, PYUSD remains significantly behind dollar-pegged stablecoins Tether and USDC. The market capitalizations of the two most prominent stablecoins are roughly $118 billion and $35 billion, respectively, as per data from CoinMarketCap.
