<\/p>\n
The crypto community embraced the news that PayPal, the $70B payments firm, was rolling out an Ethereum-based stablecoin, predicting that the company\u2019s brand and vast user base would serve as a boon to crypto markets.<\/p>\n
Three weeks later, PYUSD<\/a> is driving less than $10,000 in daily volume, and data<\/a> from Nansen shows that only a handful of wallets hold more than a thousand dollars worth of the token.<\/p>\n DeFi users in particular are avoiding PayPal\u2019s stablecoin, with the largest non-exchange wallet holding $500,006 PYUSD, followed by just $9,861 and $8,500. Only $39,750 PYUSD are held in Uniswap liquidity pools.<\/p>\n \u201cVery few people are currently using and holding PYUSD in their self-custody wallets,\u201d Nansen said. \u201cOn the surface, there’s a lack of demand from crypto users for PYUSD when other alternatives exist.”<\/p>\n Paxos, PYUSD\u2019s issuer, holds 89% of the circulating supply, followed by centralized exchanges Kraken and Coinbase with 6.6% and 2.6% respectively. Just 10 wallets currently hold more than 3,000 PYUSD tokens.<\/p>\n <\/p>\n <\/a><\/p>\n On Aug. 7, PayPal said that U.S. users with a PayPal Balance account would be able to purchase, spend, and trade PYUSD within \u201cthe coming weeks,\u201d meaning PYUSD\u2019s poor adoption is not a result of users being unable to access it.<\/p>\n Yet PayPal may not be deterred by the indifference of DeFi-natives towards PYUSD.<\/p>\n According to an Aug. 29 report<\/a> from Binance, centralized tokens make up 92% of the $124.4B combined stablecoin capitalization, with market makers operating on centralized exchanges among the asset\u2019s largest adopters.<\/p>\n PayPal is likely seeing an opportunity to step in with the decline of USDC and BUSD. USDC supply is down 40% following heavy redemptions since depegging<\/a> in March, while BUSD\u2019s capitalization has crashed 87% since New York regulators ordered<\/a> Paxos to stop issuing the token in February.<\/p>\n Tether\u2019s market cap is up 23% over the past 12 months, now comprising two-thirds of the stablecoin market. However, Tether\u2019s shadowy past and shifting reserve assets<\/a> may deter some virtual asset service providers seeking the blessing of regulators from embracing the token, creating opportunities for the likes of PYUSD to claim market share.<\/p>\nTether Dominance Rises<\/h2>\n