PayPal logo on the glass against blurred business center. Editorial 3D
PayPal stablecoin (PYUSD) is making waves as the payments giant announced the project earlier this month. The coin is now live on major crypto exchanges as the liquidity dries up in the crypto markets. The entry of the payment giants in the realm of digital assets is an acknowledgement by the traditional finance that the cryptocurrencies are here to stay.
After a strong sell-off last week, cryptocurrencies are in the midst of a recovery this week. Bitcoin fell to fresh weekly lows on Tuesday and is now trading above $26,000 on Wednesday. Despite a disappointing price action in the past few weeks, the institutional interest in digital assets seems to be rising. The launch of PYUSD is proof of that.
The latest data from the DeFi analytics website, DeFi Llama, reveals that the crypto stablecoins are thriving. These digital assets act as a liquidity floor for the whole crypto market while acting as a fiat gateway. Tether (USDT) is currently the most dominant stablecoin, occupying more than 2/3 of the total market share.
It is worth mentioning here, that the PayPal stablecoin (PYUSD) is not the first such project by a major industry player. A similar attempt was made by Facebook (now known as Meta) to launch its stablecoin Libra. However, the plan had to be discarded amid a lack of clear regulations.
Just like other dollar-pegged stablecoins, the true value of PYUSD is $1. However, due to the industry trust in PayPal and the launch hype, the stablecoin is trading at a premium on the decentralized exchange Uniswap.
However, the premium seems to be temporary, and the PayPal stablecoin price will eventually hit. Kraken is one of the first centralized exchanges which has listed PYUSD. The following data from Coingecko shows that the coin is trading at $1.03 on Uniswap.
I’ll keep posting my updated outlook on PYUSD on Twitter, where you’re welcome to follow me.
This post was last modified on Aug 23, 2023, 11:51 BST 11:51