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PayPal’s Stablecoin PYUSD is Available on Venmo to Select Users

The mobile payment service Venmo, managed by PayPal, has begun the provision of the PayPal USD stablecoin (PYUSD) to a select group of users as of September 20.

In a statement, the company shared, “We are thrilled to announce that PayPal USD is now accessible on Venmo for certain users, with a complete rollout anticipated in the upcoming weeks.”

This introduction allows Venmo users to acquire the stablecoin and transfer it through platforms like PayPal, Venmo, and other compatible external wallets, as detailed in a company press release.

The PYUSD stablecoin, which operates on the Ethereum network, is underpinned by U.S. dollar deposits and other liquid assets, including short-term treasuries. This stablecoin, introduced by the payments behemoth in August, is minted by Paxos Trust.

The PayPal USD stablecoin has already marked its presence on prominent exchanges such as Kraken, Coinbase, and Crypto.com, among others.

Additionally, the New York State Department of Financial Services (NYDFS) has granted approval for the stablecoin. This nod facilitates smoother operations for virtual currency entities licensed within New York, the statement mentioned.

Furthermore, the company’s announcement emphasized a significant milestone: this initiative represents the inaugural instance where users can seamlessly transfer a stablecoin between PayPal and Venmo without incurring any fees.

PayPal further clarified, “Users with compatible external wallets, as well as merchants accepting PYUSD payments, will also be eligible to receive transfers from Venmo users. However, standard blockchain network fees will be applicable.”

But, PYUSD Adoption Seems Sluggish

Paxos, the entity responsible for issuing PayPal’s stablecoin, recently unveiled a monthly transparency report. This document revealed that the total net assets of PYUSD, as of August 31, 2023, stood at a market collateral value of $45.3 million.

Interestingly, despite its aim to revolutionize global payments, the stablecoin hasn’t seen broad-based adoption, as highlighted in the report. Delving into the specifics, around $1.5 million of PYUSD’s reserves were buttressed by cash deposits. In stark contrast, the lion’s share of its reserves, amounting to $43.8 million, was anchored using US Treasury reverse repurchase agreements.

While PYUSD has maintained parity with the US dollar (hovering around $1), its growth has been rather sluggish, registering a mere 0.05% increment, especially when juxtaposed with veteran stablecoin Tether (USDT). The latter boasts a colossal market cap of over $83 billion, coupled with a daily trading volume that eclipses the $20 billion mark.

According to data from CoinMarketCap, in the stablecoin hierarchy based on market capitalization, PYUSD occupies the 19th spot as of the time of reporting. The relatively subdued performance of PYUSD might be attributed to the fierce rivalry prevalent among stablecoins and potential regulatory hurdles it might have encountered.

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