Paypal PYUSD Rockets Past $1B Market Cap Thanks to New Partnership

• PayPal’s stablecoin has surpassed $1 billion market capitalization within a year of its launch.
• PYUSD rewards will now be available for institutional investors through a new partnership.
• PYUSD is close to overtaking Tether’s market cap on the Solana (SOL) network.

The PayPal stablecoin, PYUSD, broke above the $1 billion market cap in just over a year following its launch.

PayPal’s Stablecoin

As per CoinMarketCap , PYUSD now has a market cap of roughly $1.01 billion after a month of strong growth. Having started the month with a $625 million market cap, PYUSD’s debut on the Solana network has proven fruitful for the aspiring stablecoin.

In addition, the firm’s partnership with Anchorage Digital to bring yield-bearing services to PYUSD for institutional investors has extended these successes. As per data from RWA.xyz , PYUSD now has 25,692 monthly active addresses, 23,716 holders, and a monthly transfer volume of over $8 billion.

Notably, a majority of PYUSD’s supply can be found on the Solana network, where it appears set to overtake Tether’s USDT.

PYUSD on Solana

As per data provided by Dune, PYUSD soared  on the Solana network since its launch in May 2024, growing to a market cap of almost $650 million in a matter of months.

This poses a threat to Tether’s USDT, which has held the dominant position on Solana for some time and currently commands a market cap of $686 million. It would seem that PYUSD could become the go-to stablecoin for the Solana ecosystem.

PYUSD has approximately $647 million circulating on Solana, meaning that it has a very small gap to close if it wishes to succeed in flipping Tether. At its current pace, PYUSD could be number 1 by the end of the week.

Stablecoin Rewards

In a bid to extend its success even further, PayPal has partnered with Anchorage Digital, an institutional digital asset custodian, to offer stablecoin rewards to institutions.

As per the official announcement  on Aug 22. 2024, Anchorage will allow institutional investors to earn “competitive rewards” on PYUSD balances held in the firm’s newly launched self-custody wallet, Porto.

Interestingly, the move seems to raise some questions about regulations, as Anchorage notes that rewards will not be classified as securities. In effect, this allows wealthy investors to sidestep U.S. banking regulations. Anchorage CEO and co-founder Nathan MacCauley commented:

“Anchorage Digital looks forward to working with crypto innovators—including protocols, foundations, VCs, and startups—to unlock the next phase of growth by supporting access to our stablecoin rewards program.”

At present, the U.S. Securities and Exchange Commission (SEC) characterizes some stablecoins as securities, although federal courts aren’t entirely certain this is the case.

Because the offering is limited only to institutional investors, Anchorage asserts that the rewards program does not constitute a security offering.

The ETF Effect

The launch of spot Bitcoin exchange-traded funds (ETFs) opened the floodgates to highly regulated, institutional-level investors to finally gain direct exposure to Bitcoin.

It is almost as a direct result of their significant success that regulated digital asset custodians are beginning to thrive in the U.S.

The latest rewards program from Anchorage is further proof that crypto, in all shapes and sizes, is extremely appealing to those who made their wealth through legacy finance.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

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