PayPal Stablecoin PYUSD Reaches $1 Billion Market Cap
Date: 2024-08-27 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Launched in 2023, PayPal USD is backed 1:1 by U.S. dollars and issued by Paxos Trust Company. The stablecoin competes with other regulated dollar-pegged stablecoins such as Circle Internet Financial’s USD Coin and Tether (USDT).
“The shift to digital currencies requires a stable instrument that is both digital in nature and easily linked to a fiat currency like the U.S. dollar,” said Dan Schulman, president and CEO of PayPal, in a statement.
PYUSD is an ERC-20 token compatible with Ethereum and is the only stablecoin supported on PayPal’s payment platforms. According to PayPal, it is designed to be “accessible to an already large and growing audience of external Web3 developers, wallets, and applications,” as well as easily integrated into cryptocurrency exchanges.
PayPal has been taking steps to expand the availability of PYUSD, including partnering with Anchorage Digital to launch a rewards program for customers who store PayPal USD stablecoins on the crypto custodian’s platform.
In May, PayPal launched PYUSD on the Solana blockchain, partnering with Crypto.com, Phantom, and Paxos to onboard users onto the blockchain network.
The company has also partnered with Web3 infrastructure provider MoonPay to allow users to purchase cryptocurrency using their PayPal account. That partnership was expanded in July to connect users to cryptocurrency betting platform Polymarket.
Coinbase, which also has an institutional custody arm, incentivizes users to hold stablecoins on its platform by offering about 5.2% annual interest on USDC. Coinbase also has a stake in Circle.
Despite its recent gains, PYUSD lags significantly behind other dollar-denominated stablecoins like Tether and USDC. The two leading stablecoins have market caps of about $118 billion and $35 billion, respectively, according to CoinMarketCap data.
