PayPal USD (PYUSD) — a stablecoin pioneered by the payment behemoth PayPal in collaboration with the cryptocurrency enterprise Paxos — witnessed a notable decline in circulation during March.
According to the most recent transparency report on PayPal USD by Paxos, the circulation of PYUSD amounted to $188.5 million in March, marking a 39% decrease compared to February. In February and January, the circulation of PayPal USD peaked at $304 million and $301 million, respectively. As of March 29, the PayPal USD treasury held $14.9 million in United States Treasury bonds, with an approximate notional value of $14.8 million.
The current market valuation of PYUSD collateral in U.S. Treasury bond-collateralized reverse repurchase agreements stands at $177.9 million, with a notional position value of approximately $174 million. The total net assets reached $192 million, with a notional position value of $189 million.
The market capitalization of PayPal USD has been on a downward trajectory since late February, following its peak at $312 million on February 26, as per CoinGecko data. The stablecoin experienced significant growth at the beginning of 2024, with its market value doubling within about a month by mid-January. As of the time of writing, PYUSD’s market capitalization stands at $194 million, reflecting a 3% increase over the past seven days.
Despite a surge in cryptocurrency markets, evidenced by Bitcoin (BTC) surpassing all-time highs above $73,000 on March 13, the circulation of PYUSD experienced a decline. Cointelegraph reached out to Paxos for a comment on the drop in PYUSD circulation but has not yet received a response.
PayPal introduced the PayPal USD stablecoin in partnership with Paxos Trust in August 2023, touting it as tailored for digital payments and Web3. Pegged to the U.S. dollar at a 1:1 ratio, PYUSD is backed by U.S. dollar deposits, short-term Treasuries, and other cash equivalents.
Eight months post-launch, PYUSD has established itself as a prominent stablecoin, ranking as the 13th largest stablecoin by market capitalization, surpassing Paxos’ Pax Dollar (USDP) and Gemini Dollar (GUSD), according to CoinGecko.
PYUSD’s market value constitutes merely 0.18% of the market value of Tether (USDT) stablecoin, which boasts a market value of $106.6 billion at the time of writing. The collective market capitalization of all stablecoins amounted to $155 billion at the time of publication.