- At press time, PYUSD’s market cap was under $5 million.
- PayPal USD trailed behind over 30 stablecoins as adoptions drag.
The payment giant PayPal introduced PayPal USD [PYUSD] earlier this month as a competitor to existing stablecoins. After several weeks since its launch, how well has it performed? Is it effectively competing in the stablecoin market as anticipated?
Ranking the PayPal USD weeks after launch
On 7 August, PayPal announced the launch of its stablecoin, which was set to be issued by Paxos. According to PayPal’s statement, customers who acquired PayPal USD would have the ability to transfer this stablecoin between compatible external wallets and PayPal accounts.
Additionally, they would be able to use PayPal USD to make purchases. As of this writing, based on DefiLlama’s data, the stablecoin’s market capitalization was approximately $4.5 million.
Regarding its current market standing, data from CoinMarketCap indicated that it held the 2,175th position among various crypto assets and ranked 39th within the stablecoin category.
Furthermore, the PYUSD stablecoin had a total supply of 47 million tokens, as reported by CoinMarketCap.
PayPal USD volume spikes and drops
The volume chart from Santiment illustrated the rapid accumulation of trading activity for PayPal USD shortly following its launch. The chart demonstrated a noticeable upward trend in volume, reaching its pinnacle at over 4.2 million around 24 August.
Nevertheless, there has been a subsequent decline, with the volume dropping below 1 million. As of this writing, the volume had settled at approximately 1.3 million.
Source: Santiment
PYUSD fails to dominate
Despite being in development for nearly a year, the anticipation was for PayPal’s stablecoin to experience a swifter adoption rate. Nevertheless, various metrics indicated that this expectation didn’t materialize, with established stablecoins like USDC and Tether USDT maintaining their dominant positions in the market.
However, this landscape might transform due to the recent communication from the Federal Reserve to banks. The memo outlined the Federal Reserve’s intentions to assert oversight and regulatory control.
Notably, the directives subtly discouraged US banks from holding reserves for stablecoin issuers or facilitating stablecoin settlements. The ramifications of this shift on PYUSD are uncertain at this juncture, but it could alter the prevailing dynamics of market dominance.
