PayPal’s recent introduction of its stablecoin, PayPal USD (PYUSD), has encountered a subdued reaction among the crypto investor community. Most investors seem to maintain allegiance to established options such as Tether and USDC, leading to a restrained reception of the new digital asset.
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In a market teeming with various stablecoin choices, PayPal’s entry was anticipated to make waves. However, findings from Nansen, a blockchain analytics on-chain data firm revealed that nearly 90% of PYUSD is held in wallets controlled by Paxos, and holdings on crypto exchanges account for almost 7% of the total supply. This simply means that just 3% of the supply of PYUSD is currently held in digital wallets belonging to daily investors.
PayPal Stablecoin Faces Challenge of Gaining Trust
Notably, Tether and USDC have solidified their positions as popular choices due to their track record and widespread acceptance. Meanwhile, PYUSD, as a new entrant, faces the challenge of gaining the trust and confidence of crypto investors who have grown accustomed to the reliability of existing stablecoins.
Also, the crypto community tends to approach new offerings with a certain level of caution, especially when established alternatives have already proven their stability over time. The tepid response to PYUSD might also stem from the fact that PayPal’s venture into the stablecoin space is a relatively recent development.
The Power of PayPal’s Experience in Crypto
PayPal’s long-standing presence as a global leader in the digital payment industry since 2020 gives PYUSD a robust foundation. The company recently revealed in its quarterly report to the US Securities and Exchange Commission (SEC) that it holds a total of $943 million in crypto.
While PYUSD might be experiencing a lukewarm reception at the moment, the situation could evolve over time as PayPal demonstrates the utility and security of its stablecoin. Additionally, the future trajectory of PYUSD will likely depend on its ability to showcase its merits and navigate the competitive landscape of stablecoins.
Features and Capabilities of PYUSD
The introduction of PayPal’s stablecoin brings a plethora of exciting features and capabilities to eligible U.S. PayPal customers. Users can easily transfer PYUSD between their PayPal accounts and compatible external wallets.
Additionally, PYUSD enables seamless person-to-person payments, allowing users to send and receive funds using this stablecoin. Also, customers can utilize PYUSD to fund purchases by selecting it as the payment method during checkout.
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