PayPal's Stablecoin Achieves $1 Billion Market Capitalization

August 27, 2024 02:16 PM AEST | By Team Kalkine Media

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PayPal's Stablecoin Achieves $1 Billion Market Capitalization — Image source: shutterstock

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PayPal’s stablecoin, PayPal USD (PYUSD), has surpassed $1 billion in total market capitalization, according to data from CoinMarketCap. Launched in 2023, PYUSD is a US dollar-pegged stablecoin issued by Paxos Trust Company, a regulated crypto custodian in the US. It is designed to be backed 1:1 by US dollars and is one of the competitors in the market alongside established dollar-backed stablecoins such as Circle’s USD Coin (USDC) and Tether (USDT).

Dan Schulman, President and CEO of {PayPal} (PYUSD), emphasized the need for a stable instrument that is both digitally native and seamlessly connected to fiat currency, like the US dollar, to support the growing shift toward digital currencies.

PYUSD operates as an Ethereum-compatible ERC-20 token and is the sole stablecoin integrated into PayPal’s payment infrastructure. It is intended to be accessible to a broad and expanding network of external developers, wallets, and Web3 applications, and can be easily onboarded by cryptocurrency exchanges. PayPal has been working to enhance PYUSD’s reach by collaborating with Anchorage Digital to launch a rewards program for users who custody PYUSD with the crypto custodian.

In May, PayPal expanded PYUSD’s presence by launching it on the Solana blockchain through partnerships with Crypto.com, Phantom, and Paxos. Additionally, a partnership with Web3 infrastructure provider MoonPay was established to facilitate cryptocurrency transactions using PayPal accounts. This collaboration extended to supporting user access to the crypto betting platform Polymarket in July.

Coinbase, which holds an equity stake in Circle and operates its own institutional custody service, also offers incentives for stablecoin holders on its platform, providing approximately 5.2% annual percentage yield on USDC.

Despite these advancements, PYUSD still trails significantly behind leading dollar-pegged stablecoins like Tether (USDT) and USDC, which have market capitalizations of approximately $118 billion and $35 billion, respectively, according to CoinMarketCap data.

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