PayPal’s Stablecoin Surpasses $1 Billion Market Cap

MetaversePlanet August 27, 2024Last Updated: August 27, 2024

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Based on data from CoinMarketCap, the total market capitalization of PayPal’s U.S. dollar-pegged stablecoin, PayPal USD, has exceeded $1 billion. Launched in 2023, PayPal USD is backed by the U.S. dollar at a 1:1 ratio and is issued by Paxos Trust Company, a U.S.-regulated crypto custodian.

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Significant Achievement from PayPal

PayPal USD competes with other regulated dollar-backed stablecoins, such as USD Coin by Circle Internet Financial. In a 2023 statement, Dan Schulman, President and CEO of PayPal, emphasized:

“The transition to cryptocurrencies necessitates a stable vehicle that is both digitally native and seamlessly linked to fiat currencies like the U.S. dollar.”

PYUSD, an Ethereum-compatible ERC-20 token, stands out as the only stablecoin in its category.in supported on PayPal’s payrails. According to PayPal, it is designed to be presented to an already large and growing community of external developers, wallets, and Web3 applications, and to be easily included by cryptocurrency exchanges.

PayPal is actively working to expand the accessibility of PYUSD by collaborating with Anchorage Digital to launch a rewards program for customers who hold their USD holdings with the crypto custodian. In May, PayPal launched PYUSD on the Solana blockchain and partnered with Crypto.com, Phantom, and Paxos to onboard users to its blockchain network.

Details on the Subject

PayPal has also partnered with Web3 infrastructure provider MoonPay, allowing users to purchase cryptocurrencies using their PayPal accounts. This partnership was expanded in July to onboard users to the crypto prediction platform Polymarket. Coinbase, which also has an institutional custodian arm, encourages users to hold stablecoins on its platform and currently offers an annual percentage yield of about 5.2% in USDC. Coinbase also holds a stake in Circle.

Despite its recent successes, PYUSD still trails behind other dollar-pegged stablecoin projects like Tether and USDC. According to data from CoinMarketCap, these two major stablecoins have market capitalizations of approximately $118 billion and $35 billion, respectively.