25 February, 2024

PayPal’s Stablecoin Rises with Impressive Transaction Averages

4 weeks ago

12 Feb, 2024

  • PYUSD boasts impressive transaction averages, outperforming traditional credit card transactions by a significant margin.
  • PYUSD’s rapid rise to a $300 million market cap and adoption by major exchanges signals its disruptive potential.
  • Despite its success, PYUSD is yet to make a significant impact in the DeFi space, with most liquidity centralized on exchanges.

In a recent tweet by Ki Young Ju, a prominent figure in the cryptocurrency space, PayPal’s stablecoin is gaining significant attention for its effectiveness as a payment channel. As per his analysis, PYUSD transactions are averaging around $800, far surpassing the real-world average of credit card transactions, which is $164. 

Moreover, when compared to stablecoins primarily designed for purposes other than payments, PYUSD stands out with its robust performance. It boasts averages ranging from $50,000 to $1 million.

PayPal’s foray into the stablecoin market with PYUSD has indeed been nothing short of remarkable. In just five months since its launch in August 2023, PYUSD has surged to a $300 million market cap now trading at $1.00, claiming the number eight spot in the global stablecoin rankings. This remarkable development has garnered enthusiastic support from industry insiders, including Circle CEO Jeremy Allaire, who openly welcomed the competition from PayPal.

The rise of PYUSD to prominence has been further accelerated by its adoption on significant cryptocurrency exchanges such as Coinbase, Kraken, and HTX. Venmo joined the fray, supporting PYUSD just a month after its launch. 

However, it’s worth noting that when ordered by volume, PYUSD currently ranks eighth among stablecoins, with a 24-hour trade volume of only $11 million. This places it marginally ahead of UST Classic, which has experienced a significant deviation from its intended $1 peg.

While PYUSD continues to impress with its $300 million market cap and steady on-chain activity, it has yet to impact the decentralized finance (DeFi) landscape significantly. Most PYUSD liquidity remains on centralized exchanges, with Crypto.com being the largest holder, accounting for over one-third of the total market cap. This disparity suggests a clear separation between the DeFi and centralized exchange ecosystems for PYUSD.

Despite initial concerns that prompted an SEC subpoena when PYUSD’s market cap was half its current value, PayPal appears to have cooperated with regulatory requests, and the matter has faded from the spotlight. Furthermore, PayPal Ventures has recently begun using PYUSD for strategic investments, as seen in its stake in the institutional crypto platform Mesh.

While PYUSD has room to grow and compete with established stablecoin giants like Circle and Tether, its rapid ascent and adoption by significant exchanges have already demonstrated its potential. Additionally, its strategic use by PayPal Ventures further underscores PYUSD’s role as a disruptive force in the evolving world of digital currencies. As the financial services landscape transforms, PYUSD positions itself as a harbinger of innovation and a formidable player in the sector.