PayPal’s popular peer-to-peer mobile payments platform, Venmo, has started offering its users access to the PayPal USD stablecoin (PYUSD) on a selective basis, beginning September 20. This rollout is part of PayPal’s broader initiative to make digital assets more accessible to its user base.
PYUSD is an Ethereum-based stablecoin issued by Paxos Trust and backed by U.S. dollar deposits, along with other liquid assets like short-term treasuries. PayPal introduced this stablecoin in August, and it has since gained recognition and regulatory approval.
With the availability of PYUSD on Venmo, select users can now purchase the stablecoin and send it to others via PayPal, Venmo, and other compatible external wallets. This expansion allows for greater flexibility and accessibility when it comes to using digital assets within the PayPal ecosystem.
Wider Adoption Challenges
Despite the promise of PYUSD to facilitate global payments, adoption has been somewhat sluggish. A transparency report from Paxos revealed that the total net assets of PYUSD, as of August 31, 2023, amounted to $45.3 million. While the stablecoin has maintained its peg to the U.S. dollar, it has seen limited growth compared to established stablecoins like Tether (USDT).
Tether, with a market capitalization exceeding $83 billion and a daily trading volume surpassing $20 billion, currently holds a dominant position among stablecoins. In contrast, PYUSD ranks 19th in terms of market capitalization among stablecoins, according to CoinMarketCap data.
Several factors may contribute to PYUSD’s slower adoption, including intense competition within the stablecoin market and potential regulatory hurdles. Despite these challenges, PayPal remains committed to expanding the use and accessibility of digital assets through its various platforms.
The introduction of PYUSD on Venmo represents another step in PayPal’s efforts to integrate cryptocurrencies and digital assets into its suite of financial services. As the digital asset landscape continues to evolve, it will be interesting to see how users embrace and utilize these new financial tools.
