PayPal’s PYUSD emerged as a significant competitor in the stablecoin market, while USDT and USDC solidified their market dominance in Q3 2024.
Stablecoin titans such as USDT and USDC are extending their market share and dominance by fortifying their grip on the market.
Nevertheless, PayPal’s PYUSD is a new competitor that is generating significant interest. According to recent data, this emerging stablecoin is gathering momentum, indicating a potential shift, despite its comparatively small size so far.
The research team of asset manager Hashdex reported that stablecoins’ market dominance increased by 3% in the third quarter of 2024. USDC and USDT, the two most prominent fiat-backed dollar stablecoins, experienced a 1% and 5% increase in their respective market shares.
Despite the fact that PayPal’s PYUSD is still smaller than USDT and USDC, it experienced a remarkable 57% increase in dominance during the same period.
In August of last year, PayPal became the first financial technology company to introduce a stablecoin that is supported by the US dollar. PYUSD, which is issued by Paxos Trust Company, is entirely backed by US dollar reserves, including treasuries and currency counterparts. It is available for purchase or sale on both PayPal and Venmo, and it has a 1:1 exchange rate with the USD.
PYUSD achieved a $1 billion market cap in just 383 days after its debut, a feat that was nearly twice as rapid as USDC and three times quicker than USDT, the dominant fiat-backed stablecoins. PayPal’s stablecoin expanded its presence to Solana earlier this year after its successful 2023 launch on Ethereum.
According to HashDex Research, the stablecoin’s potential for institutional adoption has improved its outlook for the fourth quarter of 2024 and the upcoming year.
“PYUSD is gathering momentum and has the potential to capture a larger portion of the market as its distribution expands.”
Stablecoins are gaining traction in the finance sector. According to reports, Revolut, a UK-based corporation, is currently in the process of developing its own.
Ripple, a blockchain company, has also announced its intention to introduce a dollar-backed stablecoin, RLUSD, this spring. This stablecoin will be guaranteed by US dollar deposits, short-term government Treasurys, and similar assets.
Banks such as J.P. Morgan are also entering the transaction settlement niche, having developed JPM Coin to facilitate real-time payments for institutional customers.
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