PayPal’s PYUSD Gains Ground in Stablecoin Battle – Hashdex Research

Stablecoin giants like USDT and USDC continue to strengthen their dominance in the market, expanding their dominance and market share.

However, a new competitor is making waves: PayPal’s PYUSD. Although still relatively smaller, this emerging stablecoin is gaining momentum, signaling a potential turnaround, according to recent data.

Stablecoin Power Shift?

According to a report from asset manager Hashdex’s research team, stablecoin market dominance grew by 3% in the third quarter of 2024. Both USDT and USDC, the major dollar-denominated stablecoins with fiduciary support, they saw their market shares increase by 1% and 5%, respectively.

PayPal’s PYUSD, while still smaller than USDT and USDC, saw a notable increase in dominance of 57% during the same period.

PayPal last August became the first financial technology company to launch a US dollar-backed stablecoin. Issued by Paxos Trust Company, the PYUSD is fully backed by US dollar reserves such as Treasury bills and cash equivalents. It is available to buy or sell on both PayPal and Venmo and has a 1:1 exchange rate to the USD.

In just 383 days after its debut, PYUSD surpassed a market cap of $1 billion, achieving this milestone almost twice as fast as USDC and three times faster than USDT, the main supported stablecoins by fiat Following its successful launch in 2023 on Ethereum, PayPal’s stablecoin expanded its presence on Solana earlier this year.

HashDex Research suggests that possible institutional adoption through the stablecoin has boosted its outlook for the fourth quarter of 2024 and next year.

“PYUSD is gaining traction and could continue to capture more market share as its distribution increases.”

Stablecoins growing appeal in Fintech

Stablecoins are becoming increasingly prominent in the fintech industry. Reports suggest that Revolut, a UK-based company, is well on its way to creating its own.

Meanwhile, blockchain company Ripple also revealed plans this spring to launch a dollar-backed stablecoin, RLUSD, which will be backed by US dollar deposits, short-term government Treasuries and similar assets.

Banks such as JP Morgan are also entering the transaction settlement niche, having developed JPM Coin to enable real-time payments for institutional clients.

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