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    <p>When PayPal launched its US dollar stablecoin on August 7, everyone in the crypto industry noticed. Indeed, the 24-year-old, $68 billion fintech behemoth unveiling PYUSD conferred instant credibility onto the stablecoin industry.</p> 
    <p>However, real-world adoption of PayPal’s stablecoin has been sluggish. PYUSD already faces stiff competition from incumbents.&nbsp;</p> 
    <p>Older stablecoins might have shady histories yet they benefit from popular brand names, deep liquidity, Lindy effects, listings on many crypto exchanges, and fiat-denominated trading pairs around the world.</p> 
    <p>In short, the debut of PYUSD flopped. It’s barely grown to 0.05% the size of Tether, the world’s oldest stablecoin.</p> 
    <p><a rel="noopener noreferrer nofollow" title="PayPal" href="https://thebittimes.com/tag/paypal.html">PayPal</a>’s issuer Paxos just published its transparency report, disclosing <a rel="noopener noreferrer nofollow" title="PYUSD" href="https://thebittimes.com/tag/pyusd.html">PYUSD</a> reserves of just $45.3 million as of August 31, 2023. That compares to Tether’s <strong>$83.1 billion</strong>.</p> 
    <p>PYUSD’s backing includes $43.8 million in US Treasuries plus $1.5 million in cash deposits at insured depository institutions. Unlike Tether’s repeatedly broken promises about its dollar backing, PayPal has followed through with its promise to back PYUSD with dollars, short-term US treasuries, and cash equivalents.</p> 
    <p>Moreover, PYUSD has never significantly de-pegged from $1. Unlike Tether which has traded as low as $0.001 and as high as $1,000, PYUSD boasts an all-time trading range of $0.979 to $1.01. Both trade at $1 today.</p> 
    <h2 class="wp-block-heading" id="h-paypal-s-underwhelming-pyusd-stablecoin">PayPal’s underwhelming PYUSD stablecoin</h2> 
    <p>“<a rel="noopener noreferrer nofollow" title="PayPal" href="https://thebittimes.com/tag/paypal.html">PayPal</a> chose a very interesting time to <a rel="noopener noreferrer nofollow" title="launch" href="https://thebittimes.com/tag/launch.html">launch</a> a <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a>,” Ripples head of payments products Pegah Soltani told CoinTelegraph. Indeed, in February 2023, Paxos communicated with the SEC over its dealings with Binance’s <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a>, BUSD. The New York Department of Financial Services (NYDFS) also ordered Paxos to stop issuing BUSD altogether.</p> 
    <figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
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      <blockquote class="twitter-tweet" data-width="500" data-dnt="true"> 
       <p lang="en" dir="ltr">Paxos in discussions with U.S. SEC over Binance stablecoin- internal email https://t.co/3CS9UBPGV5 pic.twitter.com/LyxjCwU0bj</p>— Reuters Business (@ReutersBiz) February 21, 2023 
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     <figcaption class="wp-element-caption">
       Authorities have forced Paxos to cease issuing one of its branded stablecoins. 
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    <p><em>Read more: PayPal stablecoin can be frozen like Tether and Circle</em></p> 
    <p>Bank of America analysts have also opined that PYUSD would likely face stiff competition from CBDCs and yield-bearing stablecoins.</p> 
    <p>Interestingly, Bitcoin News found lines in PYUSD’s code that allow PayPal to freeze or <strong>wipe</strong> any PYUSD wallet on the same day that PayPal launched its stablecoin. That news quickly spread via X (formerly Twitter) and could have significantly weakened the launch of PYUSD.</p> 
    <p>The NYDFS added PYUSD to its green list of approved digital assets while removing older assets like Litecoin, Dogecoin, and Ripple.</p> 
    <p>Paxos is holding the assets used to back <a rel="noopener noreferrer nofollow" title="PYUSD" href="https://thebittimes.com/tag/pyusd.html">PYUSD</a> in a trust designed to protect tokenholders from any bankruptcy of Paxos or <a rel="noopener noreferrer nofollow" title="PayPal" href="https://thebittimes.com/tag/paypal.html">PayPal</a>.</p> 
    <p>In short, PayPal’s PYUSD has failed to gain much traction so far, with only $45.3 million in assets listed in Paxos’ first transparency report. It’s barely five one-hundredths of one percent the size of Tether. PYUSD faces stiff competition, potential regulatory hurdles, and the unpopular nature of centralized assets that can remotely freeze or erase any users’ holdings.</p> 
    <p><em>Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, </em><em>Instagram</em><em>, </em><em>Bluesky</em><em>, and </em><em>Google News</em><em>, or subscribe to our </em><em>YouTube</em><em> channel.</em></p> 
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/why-is-paypal-s-stablecoin-pyusd-struggling-a-month-after-launch-tbt63362.html">https://thebittimes.com/why-is-paypal-s-stablecoin-pyusd-struggling-a-month-after-launch-tbt63362.html</a></p>

Why is PayPal’s stablecoin PYUSD struggling a month after launch?

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