Stablecoin giants like USDT and USDC continue to tighten their grip on the market, increasing their dominance and market share.
But a new competitor, PayPal’s PYUSD, is making waves. Although still relatively small, recent data shows that this emerging stablecoin is gaining momentum and indicates potential change.
Stablecoin power shift?
The market power of stablecoins increased by 3% in the third quarter of 2024, according to a report from the research team at asset management firm Hashdex. USDT and USDC, the leading fiat-backed dollar stablecoins, both increased their market share by 1% to 5% each.
PayPal’s PYUSD, while still smaller than USDT and USDC, experienced an impressive 57% rise in dominance over the same period.
PayPal became the first financial technology company to issue a USD-backed stablecoin last August. Issued by Paxos Trust Company, PYUSD is fully supported by US dollar reserves such as government bonds and cash equivalents. You can buy or sell with both PayPal and Venmo, with a 1:1 exchange rate against USD.
PYUSD surpassed the $1 billion market cap in just 383 days after its debut, achieving this milestone almost twice as fast as USDC and three times faster than USDT, the leading fiat-backed stablecoin. PayPal’s stablecoin expanded its presence on Solana earlier this year following a successful launch on Ethereum in 2023.
HashDex Research suggests that the potential for institutional adoption via stablecoins is driving the outlook from the fourth quarter of 2024 to next year.
“PYUSD is gaining momentum and is likely to continue gaining even more market share as circulating volumes increase.”
The appeal of stable coins is increasing with FinTech
Stablecoins are gaining increasing attention in the fintech industry. According to reports, UK-based company Revolut is well underway with its own product.
Meanwhile, blockchain company Ripple also revealed plans this spring to launch RLUSD, a dollar-backed stablecoin backed by U.S. dollar deposits, Treasury bills, and similar assets.
Banks like JPMorgan are also entering the trade payments niche with the development of JPM Coin, which enables real-time payments for institutional customers.
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