[ad_1]
PayPal's entry into the stablecoin market on August 7, 2023 was welcomed by many in the industry, with Circle CEO Jeremy Allaire stating that competition from PayPal was “tremendous.”
News of the launch led to a modest 4% rise in the price of Bitcoin, and within days, exchanges offered low-cost promotional opportunities to traders eager to use PayPal's PYUSD. Before the end of August, Coinbase, Kraken, and HTX had listed the stablecoin, adding Venmo support just a month later.
Five months after its launch, the PYUSD now claims the number eight position by market capitalization in the global stablecoin charts, after reaching the $300 million mark around January 22. However, PYUSD falls to eleventh when ranked by volume, with only $10 million in 24-hour trading volume. That barely puts it ahead of UST Classic, which, priced 98% below its original forecast price of $1, has traded just $500,000 lower over the past day.
Still, PayPal's PYUSD rise to $300 million locked in five months is impressive. In addition to an increase in market capitalization, the token experienced constant chain activity, with a modest 200 to 400 transactions per day.
However, PYUSD has yet to enter the DeFi landscape in any significant way, as highlighted in the table and diagram below. The majority of PYUSD liquidity is on centralized exchanges, with Crypto.com being the largest holder of the token with $113 million, or just over a third of the total market capitalization.
The visualization below represents transactions between major entities exclusively for PYUSD. Entities holding larger PYUSD holdings are displayed larger than those holding smaller amounts. Entities without logos on the far right are unknown wallets holding over $30,000. The logos at the top right represent commercial entity tokens, likely Treasury holdings.
Interestingly, there are several links between PYUSD issuer Paxos, Uniswap, and Curve. Yet these entities are not tied to major exchanges, suggesting that the DeFi and CEX ecosystems for PYUSD are entirely separate.
Although PayPal was subpoenaed by the SEC when PYUSD held half the current market cap, it reportedly complied with the demands, and little news has been heard on the matter since. The filing announcement also marked the local low for PayPal's stock price, up 24% since November.
Additionally, PayPal Ventures recently began using the PYUSD stablecoin as a strategic investment mechanism, using it for 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 a critical part of product innovation, with crypto serving as the first beachhead where this is possible.”
So while PYUSD still has a ways to go to catch giants like Circle and Tether, the Web2 upstart and disruptor is certainly cementing its position in the industry.
[ad_2]
Source by [author_name]