PayPal’s stablecoin sees slow uptake in first 3 weeks

While a host of alternatives try to fill market void, Paypal’s stablecoin is slow on the uptake

article-image

Sanit Fuangnakhon/Shutterstock modified by Blockworks

share

Despite being backed by payments juggernaut PayPal and enjoying a scheduled listing today on Coinbase, the Paxos-issued stablecoin PYUSD seems to be struggling to gain on-chain adoption. 

As the total stablecoin supply has dwindled, and industry giants USDC and USDT average millions in outflows daily, a host of centralized and decentralized alternatives have risen to fill the void. Total stablecoin market capitalization is down to $124 billion compared to $167 billion at the start of 2023. 

PayPal’s PYUSD, which was announced on Aug. 7, initially appeared to be a possible contender to Circle and Tether’s 85% industry dominance. However, after three weeks the young stablecoin, which industry participants have criticized for its centralization, has struggled to gain traction. 

According to Coinmarketcap, PYUSD currently has 47 million tokens in existence. However, per DeFiLlama, the overwhelming majority have never circulated – a sign that minters are primarily sitting pat on centralized exchanges. 

Indeed, data from Nansen indicates that Paxos, the issuer of PYUSD, holds 90% of the circulating supply. While there are two decentralized exchange pools with PYUSD, they hold less than 50,000 tokens between them. 

Per Etherscan, there are merely 233 PYUSD holders total. 

In contrast, a pair of decentralized stablecoins that have launched in the past year saw significantly faster adoption. The Aave lending protocol launched GHO, which achieved a market cap of $17.53 million within its initial three weeks. Meanwhile, crvUSD from Curve surpassed $18 million shortly after its debut.

In an interview with Blockworks, Aave founder Stani Kulechov cautioned against looking too deeply into surface-level adoption metrics, however, indicating that finding real-world use cases may be more important. 

“Obviously having TVL [total value locked] and liquidity is an important base for every stablecoin out there, but it’s not exciting if all you can do is mint and provide liquidity,” he said.  “DeFi have solved the supply side – how do you generate demand? How do you provide consumption is the more interesting problem.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Maple Finance has successfully navigated significant market challenges through its strategic pivot to secured lending (Maple v2) and the launch of its Syrup product. Syrup has become a primary growth driver, delivering sustainable, outperforming stablecoin yields and rapidly increasing TVL. The upcoming custody-first Bitcoin staking product (istBTC) presents another significant avenue for expansion. Crucially, Maple has achieved operational profitability, a key inflection point that, combined with a fully vested token and active buyback mechanism, strengthens its investment case. While valuation metrics suggest potential undervaluation relative to peers and growth, the primary forward-looking risk identified is the long-term sustainability of its current high-take-rate collateral staking revenue model.

article-image

In 2014, Microsoft virus scanners were detecting viruses in Bitcoin software

article-image

Ledn’s Mauricio Di Bartolomeo explained how this cycle’s been different for the lender

article-image

The shorts looking for funding range from charming animated series to gritty live-action dramas

article-image

Money, it turns out, is emergent, like consciousness

article-image

Bridge flows churn in both directions as risk appetite returns