[NEWS] PayPal's stablecoin PYUSD struggles with limited holders

PayPal USD (PYUSD), a US dollar-linked stablecoin issued by PayPal, a major US payment company, is struggling.

According to DeFiLlama, which collects on-chain data mainly on DeFi, 37.8 million PayPal USD have been issued, but only 4.5 million are in circulation.

Meanwhile, according to Nansen, a blockchain analyst, Paxos, which handles Pax Dollar (USDP) and other cryptocurrencies, currently holds about 90% of PayPal USD. As a result, most of PayPal USD is stuck in Paxos. PayPal USD is issued through Paxos.

In addition, although several cryptocurrency exchanges began handling PayPal USD in conjunction with the release, it is still not widely used. According to Nansen, cryptocurrency exchanges only hold about 7% of the supply.

Among the top cryptocurrency exchanges are Kraken, Gate.io, and Crypto.com. According to Etherscan data, the number of PayPal USD holders is currently 292.

One of the reasons for the lack of adoption is the rising fees (gas fees) associated with issuance on the Ethereum blockchain. If the demand for Ethereum increases and the network becomes congested, the fees associated with sending and receiving PayPal USD will also rise.

Currently, stable coins such as Polygon (MATIC) are being issued on the blockchain, which allows for lower fees, so there is little benefit for existing cryptocurrency users to hold PayPal USD. It should also be noted that there is currently no significant benefit for PayPal users to use PayPal USD.

Although it has only been about three weeks since the release, PayPal will be rethinking its strategy, and attention will continue to be focused on its movements.

Currently, Tether (USDT) and USD Coin (USDC) together hold a combined share of over 80% of the stablecoin market. In particular, USD Coin recently underwent a change in structure, and will now be issued and operated solely by Circle, a US company. The company aims to gain further market share by streamlining operations.

USD Coin has also announced that it will be compatible with six new blockchains between September and October, so it is expected to become even more popular as a multi-chain compatible stablecoin.

References:DeFiLlama, Etherscan
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