PayPal’s dollar-pegged stablecoin, PayPal USD (PYUSD), has integrated with the cross-chain bridging protocol LayerZero, enabling transfers between Ethereum and Solana. In a November 12 announcement, LayerZero stated that PYUSD now uses its Omnichain Fungible Token (OFT) Standard, allowing users who self-custody their tokens to move assets seamlessly across blockchains without relying on centralized platforms like Venmo or PayPal.
Press Releasehttps://t.co/282L7BCS3M
— LayerZero (@LayerZero_Core) November 13, 2024
Shifts in PYUSD’s Market Dynamics
PYUSD’s market dynamics have changed significantly in recent months. On August 26, PYUSD reached a peak market cap of $1 billion, with $660 million circulating on Solana and $340 million on Ethereum. Currently, its market cap has dropped nearly by half, standing at $513 million, with $166 million on Solana and $384 million on Ethereum, according to DefiLlama.
PYUSD circulation has jumped on the Ethereum Blockchain. Source: DefiLlama
In May, PayPal launched PYUSD on Solana, partnering with Crypto.com, Phantom, and Paxos to on-ramp users to the blockchain. Additionally, PayPal collaborated with Web3 infrastructure provider MoonPay to let users buy crypto using a PayPal account, extending this feature in July to on-ramp users to the crypto betting platform Polymarket.
Anchorage Digital, a crypto custodian, introduced a rewards program for clients who custody PYUSD through its platform, according to an August 22 announcement. The program, the first of its kind from Anchorage Digital, is available to clients who custody PYUSD directly or through its institutional self-custody wallet, Porto. “PYUSD remains fully accessible and segregated in participants’ accounts on-chain for quick deployment,” Anchorage stated. The program allows users to earn rewards without staking, lending, or rehypothecation.
PayPal’s Vision for Digital Currency
PayPal’s efforts to expand PYUSD’s accessibility align with its larger vision for digital currencies. “The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” said Dan Schulman, PayPal’s president and CEO, in a 2023 statement. As an ERC-20 token on the Ethereum blockchain, PYUSD is accessible to a growing network of external developers, wallets, and Web3 applications, according to a February PayPal announcement.Despite PYUSD’s recent growth, it still trails behind major dollar-pegged stablecoins like Tether (USDT) and USD Coin (USDC). According to CoinMarketCap, USDT and USDC maintain larger market caps, currently around $118 billion and $35 billion, respectively.
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