PayPal’s US dollar-pegged stablecoin, PayPal USD, has surpassed $1 billion in total market capitalization, as reported by CoinMarketCap.

Launched in 2023, PayPal USD is backed 1:1 by US dollars and issued by Paxos Trust Company, a US-regulated crypto custodian.

It competes with other regulated, dollar-backed stablecoins like Circle Internet Financial’s USD Coin.

Dan Schulman, PayPal’s president and CEO, stated in 2023 that the "shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar.”

As an Ethereum-compatible ERC-20 token, PYUSD is the only stablecoin supported on PayPal’s payment system.

It is designed to be “available to an already large and growing community of external developers, wallets and Web3 applications” and is intended to be easily integrated by cryptocurrency exchanges, according to PayPal.

PayPal has been actively working to increase PYUSD’s accessibility, including collaborating with Anchorage Digital to introduce a rewards program for clients who custody PayPal USD stablecoins with the crypto custodian.

In May, PayPal expanded PYUSD to the Solana blockchain, partnering with Crypto.com, Phantom, and Paxos to onboard users onto the network.

Additionally, PayPal partnered with Web3 infrastructure provider MoonPay to allow users to purchase cryptocurrency using a PayPal account.

This partnership extended in July to include on-ramping users to the crypto betting platform Polymarket.

Coinbase, which also has an institutional custody service, encourages users to hold stablecoins on its platform by offering an approximate 5.2% annual percentage yield on USDC.

Coinbase also holds an equity stake in Circle.

Despite its recent achievements, PYUSD still significantly trails behind the leading dollar-pegged stablecoins, USDT and USDC.

According to CoinMarketCap, Tether and USDC have market capitalizations of nearly $118 billion and $35 billion, respectively.

Sources:

https://cointelegraph.com/news/paypal-pyusd-stablecoin-1-billion-market-cap

https://newsroom.paypal-corp.com/2023-08-07-PayPal-Launches-U-S-Dollar-Stablecoin

https://newsroom.paypal-corp.com/2024-05-29-PayPal-USD-Stablecoin-Now-Available-on-Solana-Blockchain,-Providing-Faster,-Cheaper-Transactions-for-Consumers

https://newsroom.paypal-corp.com/2024-05-02-MoonPay-Now-Lets-Users-Buy-Sell-Crypto-funded-by-PayPal

https://coinmarketcap.com/view/stablecoin/