PayPal's Stablecoin PYUSD Faces Challenges in Gaining Adoption, According to On-Chain Data
Summary:
PayPal's stablecoin, PayPal USD (PYUSD), is struggling to gain traction as on-chain data reveals that the majority of PYUSD is held in Paxos Trust's wallets. The uptake among professional investors remains low, with limited demand seen from crypto users. Despite being in circulation for less than three weeks, PYUSD faces challenges in adoption compared to established stablecoins like USDC and USDT.
PayPal's stablecoin, PayPal USD (PYUSD), is facing difficulties in gaining traction, according to on-chain data. Nansen, a blockchain analytics firm, has found that approximately 90% of PYUSD is currently held in Paxos Trust's wallets, the stablecoin issuer. The report also reveals that crypto exchange wallets, including Kraken, Gate.io, and Crypto.com, hold around 7% of the total supply. However, uptake among well-informed or professional investors, known as "smart money" investors, remains low. The breakdown of PayPal's PYUSD top holders, as reported by Nansen, shows limited demand from crypto users, possibly due to a different target demographic. Pools in decentralized exchanges like Uniswap, specifically the PYUSD/wETH and PYUSD/USDC pairs, only represent a small number of tokens. Additionally, an analysis of individual holders indicates moderate interest, with the top holder outside of exchanges or contracts holding less than $10,000 worth of PYUSD. Fewer than ten holders, excluding contracts or exchanges, have a balance exceeding $1,000. Despite the modest adoption so far, it's important to note that PYUSD has only been in circulation for less than three weeks and was launched without prior announcement. The stablecoin is pegged to the U.S. dollar, issued by Paxos Trust Co., built on the Ethereum network, and fully backed by dollar deposits and cash equivalents. Its launch has led to increased competition among established crypto rivals. For instance, Circle, the company behind USD Coin (USDC), recently expanded its stablecoin to six blockchains, aiming to enhance adoption. According to CoinMarketCap, USDC has a market capitalization of approximately $25 billion, while Tether (USDT) holds over $82 billion in market capitalization.
Published At
8/25/2023 5:30:00 PM
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