PayPal’s stablecoin, PYUSD, has exceeded the $1 billion mark in market capitalization, more than doubling its supply since June, despite a generally sluggish crypto market.
User activity for PYUSD has skyrocketed, with monthly active wallet addresses jumping to over 25,000 in July, compared to 9,400 in May, according to Visa’s stablecoin dashboard. The growth in PYUSD’s supply followed its expansion to the Solana network in May.
PayPal’s entry into the stablecoin market was initially hailed as a major milestone for the crypto industry, but the token’s early growth on the Ethereum network was lackluster. Things turned around, however, when the PYUSD gained new momentum following its expansion to the Solana network in late May.
On Solana, PYUSD’s supply grew from zero to $650 million in just three months, surpassing its supply on Ethereum. Over the past month, PYUSD’s supply on Solana increased by 171%, rapidly closing in on Tether’s USDT on the network, according to DefiLlama data.
The integration of PYUSD with decentralized finance (DeFi) protocols on Solana, including boosted rewards for deposits on platforms like Kamino, Drift, and Marginfi, has contributed to this growth. Most recently, crypto custody firm Anchorage Digital introduced rewards for PYUSD deposits to institutions.
Despite the rapid expansion, concerns remain about the sustainability of PYUSD’s growth once these incentives phase out.
In the past month alone, the supply of PYUSD has increased by 97%. This growth places PayPal among the top ten stablecoin issuers, with Tether USD leading the niche with a supply of over 112 billion.
PYUSD’s adoption on centralized exchanges such as Crypto.com and its integration into decentralized finance protocols like Curve and Frax have also contributed to the stablecoin’s growth over the past year.
Currently, Paxos holds the largest portion of PYUSD on Ethereum, with 112 million tokens, representing over 20% of the total supply. This is followed by the Crypto.com exchange with 103 million, Defiance Capital with 35 million, BitGo with 14.8 million, and Curve with 14 million, according to on-chain data provided by Nansen.
