PYUSD stablecoin off to a slow start due to lack of demand

Nansen believes that the request for the stablecoin PYUSD from PayPal rest low. Paxosits sender, keeps 90% of the supply and the acquired tokens remain on the exchangeswithout circulation.

PayPal doesn’t seem to be following in the footsteps of Facebook and Diem. A few years after Gafam’s attempt to launch its own digital currency, the hostility of the authorities seems to have subsided.

Nevertheless, fintech still needs to convince users. And in this area, PayPal does not enjoy the same level of enthusiasm as its competitors. stablecoin at the moment, suggests Nansen. The company is off to a slow start in August.

A still hesitant demand for PYUSD

On the face of it, crypto users are not asking for PYUSD when there are other solutions available,” Nansen notes in a report cited by Blockworks. However, there are several possible explanations for this failure.

For example, the slow adoption of the new stablecoin could stem from the market target defined by the payments giant, which would be interested in a different demographic than that of its competitors and the usual crypto users.

The choice of Ethereum as the native blockchain for the new token is also being criticized due to the high transaction costs associated with the network. At this stage, Nansen believes that “smart money” holders are shunning the stablecoin PYUSD.

Less than 10 holders over $1000

Result : 90% of token supply remain held by PayPal’s partner Paxos. 7% of tokens are held on crypto exchanges, mainly Kraken, Gate.io and Crypto.com. And their holders are not rushing to use them.

Owners of PYUSD are in any case not legion at the moment, less than a month after the stablecoin was issued. Nansen notes that fewer than ten holders (excluding contracts and exchanges) have a balance in excess of $1,000.

The first holder in this category holds less than $10,000 in PYUSD. The purchase of PayPal’s stablecoin was the result of the sale of three different memecoins,” explains Nansen. It is therefore difficult at this stage to establish a typical user profile for the token.

Unused PYUSD tokens

Other data also suggest a slow start. For Coinmarketcap, about 47 million PYUSD are currently in circulation. For DeFiLlama, the overwhelming majority of tokens have never circulated, remaining on CEX.

PayPal’s initiatives in the crypto in recent years reflect a long-term ambition. It would undoubtedly be premature to conclude at this stage that the company has failed.

What’s more, the launch comes at a time when stablecoins are in decline. The total capitalization of these tokens fell sharply in 2023, to around $124 billion. It had started the year at over 165 billion.

Follow Corners.en on TwitterLinkedin, Facebook or Telegram so you don’t miss a thing.