PayPal’s PYUSD stablecoin has reached a market cap of $1B
PayPal's US dollar-pegged stablecoin, PayPal USD, has more than $1 billion in total market capitalization, according to data from CoinMarketCap.
In the year Launched in 2023, PayPal USD (PYUSD) is backed 1:1 by the US dollar and is issued by Paxos Trust Company, a US-controlled crypto custodian. It competes with other regulated dollar-backed stablecoins such as Circle Internet Financial's USD Coin (USDC).
“The transition to digital currencies requires a stable instrument that is digitally native and easily linked to fiat currencies like the U.S. dollar,” PayPal president and CEO Dan Schulman said in a 2023 statement.
An ERC-20 token compatible with Ethereum, PYUSD is the only stablecoin supported on PayPal's payment rails. According to PayPal, it is “available to an already large and growing community of external developers, wallets and Web3 applications” and is designed to be easily onboarded by cryptocurrency exchanges.
PYUSD still lags behind leading stablecoins USDT and USDC. Source: CoinMarketCap
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PayPal has been taking steps to expand PYUSD's reach, including working with Anchorage Digital to launch a rewards program for customers who hold PayPal USD stablecoins with the crypto custodian.
In May, PayPal partnered with Crypto.com, Phantom and Paxos to launch PYUSD in Solana for users using its blockchain network.
It has also partnered with Web3 infrastructure provider MoonPay to buy cryptocurrency using a PayPal account. That partnership was extended to crypto betting Polymarket for existing users in July.
Coinbase – which also has an institutional escrow arm – encourages users to hold stablecoins on its platform. It currently yields an annual percentage yield of approximately 5.2% on USDC. Coinbase has an equity stake in Circle.
Despite its recent successes, PYUSD still lags behind dollar-pegged stablecoins Tether (USDT) and USDC. According to data from CoinMarketCap, the two leading cryptocurrencies command market capitalizations of around $118 billion and $35 billion, respectively.
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