PayPal USD (PYUSD), a stablecoin launched by financial technology firm PayPal, is off to a slow start. Notably, about 90% of the stablecoin’s supply is still held by its issuer, Paxos, while only 10 individual investors hold more than $1,000 in PYUSD, on-chain data shows.
PYUSD’s Holdings on Crypto Exchanges Below 7%
Earlier this month, payments network giant PayPal launched its stablecoin PYUSD, a digital asset backed by US dollar deposits and Treasury bills. While the launch attracted significant attention in the crypto community, the same cannot be said for the stablecoin itself.
Notably, new on-chain data shows that PYUSD is grappling with slow adoption rates, with around 90% of its supply still being held in its issuer Paxos Trust’s wallets, blockchain analytics firm Nansen reported. Meanwhile, the stablecoin’s holdings on crypto exchange wallets stand below 7%, with small balances on Kraken, Crypto.com, and Gate.io. Similarly, professional investors’ holdings of PayPal’s stablecoin are negligible.
“On the surface there’s a lack of demand from crypto users for PYUSD when other alternatives exist (might be due to Paypal targeting a different demographic).”
– Nansen said in the report.
Pools in popular decentralized exchanges (DEXs) such as Uniswap’s PYUSD/USDC and PYUSD/wETH account for less than 50,000 tokens. Top individual investors displayed a moderate level of interest, with the largest non-exchange holder owning around $10,000 worth of PYUSD.
Furthermore, less than 10 holders, excluding crypto exchanges or contracts, have a PYUSD balance of more than $1,000.
PayPal Sparks Competiton Among Stablecoin Issuers
The on-chain data may come as a surprise, considering the hype PayPal USD sparked at its launch a few weeks ago. PayPal’s foray into stablecoins stimulated competition even among the most established issuers.
For example, USDC issuer Circle announced last week it intends to launch the stablecoin on six new blockchains between September and October. Under the terms of the deal, Circle’s partner, Coinbase, acquired a minority equity stake in the blockchain infrastructure firm.
At the time of writing, PYUSD’s market cap stood at $42.4 million, significantly lower than the world’s largest stablecoins, including Tether’s USDT, USDC, and DAI, which have a market worth of $82.7 billion, $25.9 billion, and $5.3 billion, respectively.
This article originally appeared on The Tokenist
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