2023-09-02 00:10:10
© Reuters Fiasco: Why did PayPal’s stablecoin fail in the crypto market?
CriptoFácil – The news caused an uproar in the market. However, adoption remains minimal. The fact is that PayPal’s (NASDAQ:) stablecoin, PYUSD, a digital currency pegged at 1:1 to the US dollar, did not take off.
According to data from the Nansen platform, more than three weeks after launch, PYUSD is generating less than $10,000 in daily volume. Furthermore, the number of wallets holding the stablecoin is also very low. As Nansen highlighted, the main reason for the stablecoin “fiasco” is the lack of demand:
“Currently, very few people use and hold PYUSD in their self-custodial wallets,” Nansen said. “On the surface, there is a lack of demand from crypto users for PYUSD when there are other alternatives.”
PayPal Stablecoin Not Taking Off
Still according to platform data, compiled by The Defiant, users of decentralized finance (DeFi), in particular, are even more uninterested in the stablecoin. The largest non-exchange wallet contains $500,006 PYUSD, followed by just $9,861 and $8,500. Only $39,750 PYUSD is held in liquidity pools.
Paxos, the blockchain company that issues PYUSD, owns 89% of the circulating supply. Next come centralized exchanges Kraken and Coinbase (NASDAQ:) with 6.6% and 2.6% respectively. Currently, only 10 wallets hold more than 3,000 PYUSD tokens.
When it first announced its stablecoin on Aug. 7, PayPal said the rollout would be gradual for fintech customers in the United States. But more than three weeks have passed since launch and support for the project is still low.
While PYUSD tries to impose itself on the market, the stablecoin of , the USDT, continues swimming in strokes. The market cap of this stable cryptocurrency has increased by 23% over the past 12 months. Now, the stablecoin accounts for two-thirds of the market.
However, the stablecoin can gain the space that was the , digital currency resulting from the partnership between Binance and Paxos. Last week, as reported by CriptoFácil, the cryptocurrency exchange reported that it will gradually discontinue the stablecoin until the first quarter of 2024.
BUSD users will not lose their money but will need to migrate to other stablecoins. In this regard, Binance asked users to convert their BUSD into FDUSD, a stablecoin that recently arrived on Binance.
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