As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market shifts and newcomers making waves. The emergence of PayPal’s PYUSD stablecoin is no exception.
Leading stablecoins such as USDT and USDC consistently fortify their position within the market, broadening their influence and control over market shares.
As a researcher, I’m closely monitoring an exciting development in the realm of digital currencies: PayPal’s PYUSD. Although it’s currently smaller compared to its peers, the pace at which it’s picking up momentum is noteworthy. Recent data suggests that this stablecoin could be a game-changer, potentially reshaping the landscape as we know it.
Stablecoin Power Shift?
Based on a report from Hashdex’s research team in 2024, the influence of stablecoins in the market expanded by approximately 3% during the third quarter. Specifically, the market shares of the two leading fiat-backed dollar stablecoins, USDT and USDC, rose by 1% and 5%, respectively.
During that time frame, PayPal’s PYUSD witnessed a significant increase of 57% in its influence compared to other stablecoins like USDT and USDC, although it continues to be smaller in size.
Back in August, PayPal was the pioneer among financial tech companies to introduce a stablecoin backed by the US dollar. This stablecoin, known as PYUSD, is supported by reserves of US dollars, including Treasury bonds and cash equivalents, issued by the Paxos Trust Company. You can buy or sell PYUSD on both PayPal and Venmo, and it maintains a 1:1 value with the US dollar.
In less than a year after its introduction, PYUSD managed to exceed a market capitalization of $1 billion, doing so at almost half the time required by USDC and nearly three times faster than USDT – two well-known fiat-backed stablecoins. Launched on Ethereum in 2023, PayPal’s stablecoin swiftly extended its reach to Solana just this year.
According to HashDex Research, the anticipated institutional acceptance through stablecoins is positively influencing their expectations for the last three months of 2024 and beyond into the following year.
The popularity of PYUSD is growing, potentially leading to an expansion of its market presence as its distribution broadens.
Stablecoins Growing Appeal In Fintech
As a crypto investor, I’m noticing more and more the rising significance of stablecoins within the fintech sector. It seems like Revolut, a UK financial service provider, is making strides towards developing their very own stablecoin.
Additionally, it was announced this spring that Ripple, a blockchain company, intends to release a stablecoin called RLUSD, backed by the U.S. dollar, as well as short-term U.S. government bonds and similar financial instruments.
Financial institutions such as J.P. Morgan are venturing into the realm of transaction settlements by creating their own digital coins like JPM Coin. This innovation allows for swift and seamless transactions between large corporate clients.
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2024-10-19 18:04