A new report has shown that the adoption of PayPal’s PYUSD stablecoin has seen less than favorable adoption rates since its inception. The crypto community remains skeptical about employing the new stablecoin for daily crypto payments and has opted for top competitor stablecoins like USDT and USDC.
PYUSD Experiences Sluggish Adoption Rate
Global payments giant PayPal released its transparency report for its stablecoin, PYUSD, and the analysis of the report reveals that the PYUSD stablecoin may not be seeing as much adoption as PayPal and PYUSD stablecoin issuer, Paxos hoped for.
Paypal launched the US dollar-backed stablecoin on August 7 which was designed to increase stablecoin offerings and facilitate the adoption of crypto payments to crypto users as well as consumers and merchants actively utilizing PayPal’s financial platform globally.
However, despite coming from one of the largest players in the payments space, the PYUSD stablecoin remains a relatively small player in the cryptocurrency market, especially when compared to industry heavyweights like Tether (USDT) and USD Coin (USDC).
A Kaiko analyst, Desislava Aubert stated to Decrypt that despite being listed on prominent exchange platforms like Coinbase and Huobi Global, the PYUSD stablecoin’s adoption rate has been progressing slowly, and its daily trade volumes have been fairly low.
“PYUSD was listed on some centralized exchanges in late August, notably Coinbase and Kraken, but its daily trading volume has been volatile and significantly lower than other stablecoins. Overall, this points to sluggish demand,” Aubert stated.
The PayPal USD stablecoin was issued by Paxos Trust Company, a technology company specializing in blockchain in August. Paxos has reported that it holds $45.3 million in assets supporting the PYUSD stablecoin.
The stablecoin is also reportedly backed with over $1.5 million in cash deposits. The majority of the coin’s reserves, approximately $43.8 million have been collateralized with the US Treasuries as reverse purchase agreements.
Currently, PYUSD has a market capitalization of $44 million, suggesting that the stablecoin’s adoption rate has been subpar due to its failure to catch and retain the attention of the crypto community.
Crypto Investors Opt For Top Stablecoins
The decline in acceptance and adoption of the PYUSD may be attributed to the unfamiliarity of the cryptocurrency as a new stablecoin. The stablecoin market is also heavily saturated with well-established cryptocurrencies like USDT, USDC, and others.
Given this, a large number of crypto investors are presently opting for these top stablecoins to facilitate their cryptocurrency transactions. This is further propelled by the fact that these stablecoins have created a considerable reputation for themselves over the years due to their reliability and sustainability.
Presently, USDT has a market capitalization of over $83 billion and USDC has a market cap of $26 billion. At the time of writing, USDT stablecoin’s 24-hour trading volume is over $22 billion as compared to PYUSD stablecoin’s 24-hour trading volume of only $3.2 million.
Despite PYUSD’s sluggish adoption rate, PayPal remains committed to its cryptocurrency ventures. The payment giant has expanded into different regions globally using its brand name and reliable reputation as an international financial service provider to facilitate crypto adoption and awareness among users in different countries.
PayPal's stablecoin maintains dollar peg | Source: PYUSD/USD on Tradingview.com
Featured image from Blockzeit, chart from Tradingview.com