In March, PayPal USD (PYUSD) — a stablecoin issued by PayPal and Paxos – experienced a significant drop in circulation, according to Paxos’ transparency report. PYUSD circulation totaled $188.5 million in March, a 39% decrease compared to February’s circulation.
As of March 29, PYUSD’s treasury included $14.9 million in United States Treasury bonds. The market value of PYUSD collateral in U.S. Treasury bond-collateralized reverse repurchase agreements was $177.9 million, with total net assets amounting to $192 million.
PYUSD’s market capitalization has been declining since late February, after reaching an all-time high of $312 million on Feb. 26. Despite the drop in circulation, PYUSD’s market capitalization stood at $194 million at the time of writing, marking a 3% increase in the past seven days.
The decline in PYUSD circulation occurred amidst a cryptocurrency market rally, with Bitcoin breaking all-time highs above $73,000 on March 13.
PayPal launched PYUSD in August 2023 in collaboration with Paxos Trust. Designed for digital payments and Web3, PYUSD is pegged to the U.S. dollar on a 1:1 ratio and backed by U.S. dollar deposits, short-term Treasurys, and other cash equivalents.
Eight months after its launch, PYUSD has emerged as a significant stablecoin, ranking as the 13th largest stablecoin by market capitalization, surpassing Paxos’ Pax Dollar (USDP) and Gemini Dollar (GUSD). However, its market value remains a small fraction of Tether (USDT), which boasts a $106.6 billion market value. The total market capitalization of all stablecoins amounted to $155 billion at the time of publication.
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