PayPal: the stablecoin PYUSD has surpassed one billion dollars

PYUSD, that is the stablecoin of PayPal anchored to the US dollar, recently surpassed for the first time the billion dollars of market capitalization. 

It happened two days ago, during the weekend. 

The growth of PayPal’s steblecoin PYUSD

PYUSD landed on the crypto markets less than a year ago, in September 2023.

Initially, it had a market capitalization of less than 50 million dollars, which effectively made it a minor stablecoin. 

Already from the following month, however, it began a growth path, which led it to exceed 100 million in October and 150 million in November.

With the start of the latest bullrun, at the end of 2023, its market capitalization grew again, surpassing 250 million in December, and 300 million dollars in January of this year. 

However, despite this already significant growth in just four months, at the time it had not yet entered the elite of the major stablecoins in the world by market capitalization. 

Furthermore, in March it recorded a sharp setback, with the return below 200 million dollars in market capitalization. 

The MiCA

A real turning point came in June, with the entry into force in EU countries of the new European crypto regulation, the MiCA. 

To tell the truth, already in April the market capitalization of PayPal’s stablecoin had returned to 300 million dollars, but at that point, it was still only the recovery of what it had lost the previous month.

Between May and June, however, it had managed to rise to 400 million, but afterwards things went even better. 

The MiCA came into effect, regarding stablecoins, on June 30, although there are 60 days to comply. 

The fact is that stablecoins that do not comply with the new EU crypto regulation will have to be made unavailable to those residing within the European Union. 

The stablecoin by PayPal, PYUSD, is one of the few that has already obtained MiCA approval, so it has already started to nibble away market share from those that have not yet obtained it, and might not even obtain it. 

The challenge to the major stablecoins

In July, after the entry into force in the EU of the new MiCA regulations regarding stablecoins, the market capitalization of PYUSD suddenly jumped to almost 600 million dollars, then began a further rise, still ongoing, which first led it to exceed 700 million before mid-August, and then to even surpass one billion dollars in less than two weeks. 

It is worth noting that this rapid growth, which began in July, seems to be still ongoing, so it would not be surprising if in the coming months it ends up reaching figures even well above the current ones. 

There are different types of stablecoin, but in particular, they can be distinguished by two factors: the anchor price and the collateral. 

The stablecoin di PayPal è una di quelle che è ancorata al dollaro USA (USD), ed è interamente collateralizzata in dollari USA o equivalenti. 

This is the most important type, so much so that it includes both of the two main stablecoins in the world, USDT and USDC. 

Taking into consideration only this type of stablecoin, within the ranking of those with the highest market capitalization, PYUSD has even risen to the fourth absolute position. Moreover, USDT and USDC seem unattainable, but the third place is not far away. 

The further growth

As mentioned before, the current growth trend of the market capitalization of PYUSD seems to be able to continue. 

The key point is precisely compliance with MiCA. 

USDT for now does not appear to be compliant with the new European regulations, but it is possible that Tether is working on some kind of solution. 

USDC instead, like PYUSD, is already compliant. 

The third in the ranking, excluding those that are not collateralized in USD, is FDUSD (First Digital USD), with just over three billion dollars in market capitalization. 

Although PYUSD with its billion dollars still seems very far away, it should not be forgotten that FDUSD is still not compliant with MiCA. 

Despite this, FDUSD has also grown significantly in the recent period, rising from less than two billion dollars in the first half of August to the current three billion. However, it is still well below its all-time high of 4.4 billion in April, and since then it has dropped considerably due to concerns that it might be delisted in EU countries. 

Solana

The stablecoin of PayPal exists on two chains, Ethereum and Solana.

Recently, however, it has grown especially on Solana. 

In fact, by mid-August there were already more PYUSD tokens on Solana than on Ethereum. 

Among other things, PayPal’s stablecoin landed on Solana only three months ago, but the significant growth in July and August caused it to focus precisely on this chain. 

Leading the way were especially the DEX Jupiter and Orca, where PYUSD is increasingly used. 

So it is not only the introduction of the new European crypto regulation that has given the decisive push to the takeoff of this project, but also the spread on the DEX within the Solana ecosystem. 

It is worth noting that PayPal’s stablecoin is considered to be one of the safest in the world, especially in terms of security and collateral.

Suffice it to say that from the second half of September 2023 onwards, its market value never fell below $0.995, and never rose above $1.01.