Sokipiriye Dokubo
PayPal’s stablecoin, PayPal USD (PYUSD), has achieved a major accomplishment by exceeding $1 billion in total market capitalization, as reported by CoinMarketCap. PYUSD, which is tied 1:1 to the US dollar, was introduced in 2023 and is managed by Paxos Trust Company, a regulated US-based cryptocurrency custodian, competing with other prominent regulated, dollar-backed stablecoins like Circle’s USD Coin (USDC) and Tether (USDT).
In a 2023 announcement, Dan Schulman, PayPal’s president and CEO, highlighted the significance of a stable digital asset that is inherently digital and easily linkable to conventional fiat currencies such as the US dollar. PYUSD, an Ethereum-compatible ERC-20 token, is the sole stablecoin integrated into PayPal’s payment infrastructure. It is developed for wide availability to an expanding community of external developers, digital wallets, and Web3 applications, simplifying the integration process for cryptocurrency exchanges.
Efforts to broaden the accessibility of PYUSD are underway at PayPal. One such endeavor is a collaboration with Anchorage Digital to introduce a rewards program for customers who hold PayPal USD stablecoins with the crypto custodian.
In May 2023, PayPal expanded the presence of PYUSD by introducing it on the Solana blockchain. This move, a joint effort with Crypto.com, Phantom, and Paxos, aims to streamline users’ integration into the Solana network. Moreover, PayPal teamed up with Web3 infrastructure provider MoonPay, enabling users to directly buy cryptocurrency using their PayPal accounts. This partnership extended in July to provide access to the crypto prediction market Polymarket for users.
Concurrently, Coinbase, with its institutional custody services, is encouraging users to hold stablecoins on its platform by offering an annual percentage yield of approximately 5.2% on USDC. Coinbase’s alignment with stablecoins is strengthened by its ownership stake in Circle, the creator of USDC.
Despite the advancements and accomplishments of PYUSD, it lags behind its primary rivals, Tether (USDT) and USDC, in terms of market capitalization. Data from CoinMarketCap shows that Tether and USDC boast substantial market capitalizations of around $118 billion and $35 billion, respectively, surpassing that of PYUSD by a significant margin.