CoinMarketCap data shows PayPal’s USD-pegged stablecoin project, PayPal USD, has surpassed a $1 billion market cap. Launched in 2023, PayPal USD is backed 1:1 by the US dollar and issued by Paxos Trust Company, a US-regulated crypto custodian.
Significant Achievement by PayPal
PayPal USD competes with other regulated dollar-backed stablecoins like Circle Internet Financial’s USD Coin. PayPal’s President and CEO Dan Schulman shared the following in a 2023 statement:
“The transition to cryptocurrencies requires a stable instrument that is digitally native and easily connected to fiat currencies like the US dollar.”
An ERC-20 token compatible with Ethereum, PYUSD is the only stablecoin supported on PayPal’s payment rails. According to PayPal, it is designed to be easily integrated by a large and growing community of external developers, wallets, and Web3 applications, as well as by crypto exchanges.
PayPal is taking steps to expand the accessibility of PYUSD, including working with Anchorage Digital to launch a rewards program for customers holding PayPal USD assets with the crypto custodian. In May, PayPal launched PYUSD on Solana and partnered with Crypto.com, Phantom, and Paxos to integrate users into the blockchain network.
Details on the Subject
Additionally, PayPal partnered with Web3 infrastructure provider MoonPay to enable cryptocurrency purchases using a PayPal account. This partnership was expanded in July to integrate users into the crypto prediction platform Polymarket. Coinbase, which also has an institutional custody arm, encourages users to hold stablecoins on its platform, currently offering about 5.2% annual percentage yield on USDC. Coinbase also holds a stake in Circle.
Despite its recent successes, PYUSD still lags far behind dollar-pegged stablecoin projects Tether and USDC. According to CoinMarketCap data, the market caps of the two leading stablecoins are approximately $118 billion and $35 billion, respectively.
