PayPal Stablecoin PYUSD Market Cap Reaches $300 Million in Five Months
PayPal’s entry into the stablecoin market on August 7, 2023 was welcomed by many in the industry, with Circle CEO Jeremy Allaire saying that competition from PayPal was “great.”
News of the launch led to a small 4% increase in the price of Bitcoin, and within days the exchange offered a low-fee promotion for traders willing to use PayPal’s PYUSD.
By the end of August, Coinbase, Kraken, and HTX had listed the stablecoin, and Venmo support was added a month later.
Five months after its launch, PYUSD now holds the eighth position in the global stablecoin charts, having passed the $300 million mark around January 22. However, sorted by trading volume, PYUSD has fallen to eleventh place overall, with just $10 million in 24-hour trading volume. This puts it just slightly ahead of UST Classic, which is trading 98% below its original $1 peg and has traded just $500,000 less in the past day.
Nonetheless, the climb to $300 million in value locked in PayPal’s PYUSD in five months is very impressive. In addition to the increase in market cap, the token’s on-chain activity has also been steady, with 200 to 400 transactions per day.
However, as shown in the table and chart below, PYUSD has yet to break into the DeFi space in any meaningful way. Most of PYUSD’s liquidity is on centralized exchanges, and Crypto.com is reportedly the largest single holder of the token, worth $113 million, slightly more than a third of the total market cap.
The visualization below depicts transactions between major entities specifically for PYUSD. Entities holding more PYUSD are larger than those holding smaller amounts. The unmarked entity on the far right is an unknown wallet holding more than $30,000. The logo in the top right corner depicts a commercial entity token, likely a treasury asset.
Interestingly, there are multiple connections between PYUSD issuers Paxos, Uniswap, and Curve. However, these entities are not subsequently linked to major exchanges, indicating that PYUSD’s DeFi and CEX ecosystems are completely independent.
Although PayPal was subpoenaed by the SEC when PYUSD was worth half its current market cap, it has reportedly complied with the request but little has been heard about it since. The release of the filing also marked a local low for PayPal’s stock price, which has risen 24% since November.
Additionally, PayPal Ventures recently began using the PYUSD stablecoin as a strategic investment mechanism, using it to take a stake in institutional crypto platform Mesh. Amman Bhasin, partner at PayPal Ventures, commented:
“As the world of financial services undergoes rapid transformation, we believe user ownership and asset portability will become key components of product innovation, and cryptocurrency will be the first beachhead to achieve this.”
So while PYUSD still has a long way to go to catch up to giants like Circle and Tether, this debuting web2 disruptor is certainly solidifying its place in the industry. #PayPal #稳定币
