Stablecoins are a breath of fresh air in the cryptocurrency market. They provide a stabilising presence in an otherwise volatile industry. These coins are consistently pegged to a real-world commodity or fiat currency to control their price and avoid uncertainty.
Numerous stablecoins have emerged recently, with USDT and USDC leading the charge and acquiring top spots in the sector. However, with PayPal entering the scene and introducing its unique stablecoin name, PYUSD, the pecking order might change soon. Let’s explore.
PayPal’s PYUSD Coin Explained
Paypal entered the crypto scene in 2020 by allowing users to pay with Bitcoin currency on its platform. In the next two years, PayPal added Ethereum, Litecoin and Bitcoin Cash as payment methods to continue their crypto adoption efforts.
Finally, PayPal launched PYUSD in August of 2023 as an ERC-20 token, swiftly becoming one of the most extensive stablecoin offerings in the sector. The PYUSD token utilises short-term US treasuries as a pegging benchmark to solidify its 1:1 ratio to the US dollar.
With this launch, PayPal aims to solidify its place among the leading digital payment methods and fully embrace the decentralised way of conducting transactions worldwide. Paypal fully supports the development of stablecoins as a dominant method for conducting global transactions.
What To Expect After PYUSD’s Launch?
Despite its global popularity, the stablecoin niche has experienced a turbulent time due to several major factors. First, the collapse of TerraUSD was a major hit to this sector. The 2022 crypto winter also left its mark on the stablecoin niche. The general public started to doubt the effectiveness of stablecoins and their ability to maintain a stable price. Therefore, PYUSD needs to ensure security and prove the reliability of its pegging mechanism.
Thus far, PYUSD has shown strong underlying methodology and robust security measures, acquiring universal public approval. However, it still has to compete with USDT and USDC, two of the most widely adopted stablecoins. So, let’s review these tokens and their performance on the market.
Tether – USDT
USDT has achieved the third spot in the entire crypto market with a market cap of over $83 billion. USDT does not have the potential upside of other cryptos, as it is firmly pegged to the US dollar. However, its numerous use cases and convenience for global transactions have garnered the attention of the worldwide public.
USDT powers e-commerce platforms, Web3 projects, online stores and numerous other ventures that conduct borderless payments regularly. USDT is the biggest competitor for PYUSD, as it has accumulated worldwide recognition and a respectable reputation.
USD Coin – USDC
USD coin (USDC) is another stablecoin firmly featured in the top 10 most widely adopted cryptos worldwide. Currently, USDC’s market cap is over $25 billion thanks to its reliability and ease of use.
The USDC coin was created with the methodology of the Ethereum ERC-20 protocol and is compatible with several different blockchain networks, including Tron, Polygon, Avalanche, and others.
The same creative team that produced USDC also founded EUROC, which increased USDC’s usage and popularity as a trustworthy and stable payment method across several web3 projects and online platforms.
With the introduction of the PYUSD token, PayPal aims to become one of the key players in the stablecoin market, powering numerous exciting projects in the blockchain landscape. Paypal has utilised its accumulated experience and robust ecosystem to deliver a polished and practical stablecoin offering that will benefit merchants, businesses and numerous projects across the globe. Thus, PYUSD will likely acquire one of the top spots in the stablecoin market sooner than later.