PayPal’s digital currency offering, PayPal USD or PYUSD, has surpassed the $1 billion mark in total market capitalization, per CoinMarketCap data. As a US dollar-pegged stablecoin, PYUSD competes with the likes of Circle’s USD Coin (USDC) and Tether’s USDT. Launched in 2023, PYUSD is backed on a 1:1 basis by US dollars. The coin is issued by Paxos Trust Company, a regulated crypto custodian in the US.
PayPal’s CEO, Dan Schulman, emphasized in 2023 the growing need for stable, easily transactable digital currencies that can still be linked to traditional fiat currencies. PYUSD is PayPal’s response to this requirement, as a stablecoin operating on the company’s payment platform. As an ERC-20 token compatible with Ethereum, PYUSD is designed to be adopted readily by external developers, digital wallets, Web3 applications, and cryptocurrency exchanges.
PayPal has undertaken significant measures to expand access to PYUSD. In collaboration with Anchorage Digital, the company has introduced a rewards program for clients who maintain custody of PayPal USD stablecoins with the crypto custodian.
In addition to these initiatives, the company expanded PYUSD onto the Solana blockchain network in May. This expansion was achieved through partnerships with Crypto.com, Paxos, and Phantom to facilitate user onboarding onto the network.
In a strategic alliance with MoonPay, a Web3 infrastructure provider, PayPal has enabled clients to purchase cryptocurrency directly using their PayPal account. The alignment also saw PayPal extend its onboarding activities to users of the crypto betting platform, Polymarket, in July. Concurrently, Coinbase, which holds equity in Circle’s stablecoin project, incentivizes users to hold stablecoins on its platform, offering an approximately 5.2% annual percentage yield on USDC holdings.