PayPal stablecoin sees market share drop to just 0.18%

The PayPal USD (PYUSD), a stablecoin issued jointly by PayPal and Paxos, saw a massive decrease in circulation in March 2024, according to the latest transparency report from Paxos.

The report reveals that the circulation of PYUSD fell to $188.5 million in March, marking a 39% decrease from its February figures.

In the early months of 2024, PayPal USD had shown promising growth, with its circulation reaching highs of $304 million in February and $301 million in January. However, despite the cryptocurrency market’s overall rally in March, which saw Bitcoin reaching new all-time highs, PYUSD’s market capitalization began to decline from late February after peaking at $312 million on February 26.

As of the end of March, the PayPal USD treasury held $14.9 million in United States Treasury bonds, with a notional value of about $14.8 million. The total net assets stood at $192 million, against a notional position value of $189 million. This reflects the collateral backing the stablecoin, primarily in U.S. Treasury bond-collateralized reverse repurchase agreements, valued at $177.9 million in current market value and $174 million in notional position.

Despite the recent downturn, PYUSD has seen its market capitalization recover slightly to $194 million, indicating a 3% increase over the past week. This growth comes in the context of an industry-wide uplift but contrasts with the stablecoin’s sharp circulation drop.

Launched in August 2023 by PayPal in partnership with Paxos Trust, the PayPal USD stablecoin was introduced as a digital payments and Web3-centric currency, pegged 1:1 to the U.S. dollar. The stablecoin is backed by U.S. dollar deposits, short-term Treasury securities, and other cash equivalents. Eight months following its launch,

Despite its small market share of just 0.18% compared to Tether’s (USDT) $106.6 billion market value, PYUSD has established itself as the 13th largest stablecoin by market capitalization, surpassing Paxos’ own Pax Dollar (USDP) and the Gemini Dollar (GUSD).