The American multinational PayPal Inc. revealed in a Wednesday, September 20 statement availing the PayPal USD (PYUSD) stablecoin to Venmo users. The financial technology company indicated that integration will allow the mobile-based payment application users to purchase the PYUSD stablecoin.
The firm behind the popular online payment system, Paypal, illustrated that select users in the Venmo application can acquire the platform’s ERC-20 stablecoin. PayPal assured that it would scale the PYUSD stablecoin availability beyond the select usage. In particular, it targets expanding access to all users in the subsequent weeks.
PayPal Expands PYUSD Usage Beyond Ethereum Network
The statement signals plans to expand the availability of PYUSD on various platforms through an Ethereum-based stablecoin. The firm assured the liquidity of the dollar-pegged stablecoin made possible by short-term treasuries and cash equivalents.
The move to expand the availability of PYUSD stablecoin to Venmo comes a month after its unveiling in August. The firm indicated that currently, Paxos Trust Co handles the token issuance. Besides, interested users can acquire the PYUSD stablecoin from Crypto.com besides Kraken and Coinbase.
PayPal Announces Zero-cost Transfer for PYUSD Stablecoin
The availability of PYUSD on Venmo is set to leverage the mobile payments application also owned by PayPal. Venmo is a mobile-based payment channel that allows users to settle payments owed to merchants and colleagues. The integration will enable users to purchase and transfer the PYUSD stablecoin to other Venmo users and PayPal Wallets.
PayPal added that it was facilitating free stablecoins transfers amongst users. The announcement indicated that the zero-cost transfers were limited to PayPal and Venmo ecosystems. Users sending the PYUSD stablecoin to other crypto wallets would incur fees. The announcement portrayed the PayPal-Venmo integration as boosting interoperability, given that each wallet commands over two million.
The Wednesday statement identified stablecoin as a digital asset pegged to a stable asset or fiat currency. The dollar-pegged stablecoins have gained popularity for allowing traders to exit the crypto transactions.
The stablecoins usage is inevitable for such traders when they lack access to fiat currencies. Consequently, stablecoins help traders avoid losing opportunities when their deposits are held in traditional bank deposits. Their availability yields a seamless buying and selling of crypto tokens.
PYUSD Stablecoin Struggles to Garner Usage
PayPal demonstrated that unveiling the PYUSD stablecoin in August aimed at making it a critical constituent of its payments infrastructure. Nonetheless, PayPal has miles to cover as it plays catch up to Tether’s USDT and Circle’s USDC, which are the first and second largest by market capitalization. In contrast, PYUSD market capitalization is a meager $44.3 million compared to USDC 25.9B and USDT $83.1B.
The dismal performance by PYUSD is evident in Paxos Trust’s recent report admitting that by August 31, it was holding $45.3 million in assets backing. The report affirms that PayPal users could execute purchase and sale transactions involving Bitcoin Cash, Litecoin, Bitcoin, and Ethereum.
Availing PYUSD to Venmo portrays efforts by PayPal to trigger the stablecoin’s usage. Previously, the blockchain analytic Nansen revealed that over 90% of the PYUSD supply remains within Paxos Trust’s wallets.
The concentration invokes concerns over the capability to realize the stablecoin decentralization objective. A review of PYUSD supply shows Kranken, Crypto.com, and Gate.io account for 7%. It leaves little units for smart-money investors. Also, the concentration lowers PYUSD’s functioning as an alternative digital currency to USDT and USDC.
SureTradeGroup.com is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site is paid content that is not written or posted by our writers or editors and the opinions expressed do not reflect the opinions of this website. Any disagreement you may have with brands or companies mentioned in articles will need to be taken care of directly with those specific brands and companies. The responsibility of anyone who may click links in our articles and ultimately sign up for that product or service is their own. Forex, Stocks, Cryptocurrencies, NFTs and Dogital Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.