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    Home»News»Here’s Why PayPal’s Stablecoin (PYUSD) is Struggling for Adoption
    News

    Here’s Why PayPal’s Stablecoin (PYUSD) is Struggling for Adoption

    Anietie DavidBy Anietie DavidAugust 26, 2023Updated:August 26, 2023No Comments2 Mins Read
    Here's Why PayPal's Stablecoin (PYUSD) is Struggling for Adoption
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    PayPal’s highly anticipated entry into the stablecoin market with the release of PayPal USD (PYUSD) has encountered initial hurdles in gaining traction, as revealed by recent on-chain data analysis. The findings, conducted by blockchain analytics firm Nansen, have shed light on the current distribution and adoption patterns of PYUSD within the cryptocurrency landscape.

    According to Nansen’s report, approximately 90% of the total supply of PayPal USD is currently held within the wallets of Paxos Trust, the stablecoin’s issuer. The dominance of Paxos Trust’s wallets in holding the stablecoin indicates a significant centralization of the asset’s distribution.

    Crypto exchange wallets have also emerged as a notable storage option for the stablecoin, accounting for nearly 7% of the total supply. Key platforms housing PYUSD include Kraken, Gate.io, and Crypto.com. However, despite the presence of the stablecoin on these exchanges, its uptake among well-informed investors, commonly referred to as “smart money,” remains minimal.

    Lack of Demand Defeats High Expectations for PYUSD

    PayPal’s debut in the stablecoin space in early August was met with high expectations within the crypto industry. Initial hopes were pinned on the stablecoin’s potential to foster wider adoption of cryptocurrencies and introduce digital assets to a mainstream audience for the first time. While PayPal boasts a massive user base exceeding 350 million globally, the adoption of its stablecoin and its usage within self-custody wallets during the initial weeks has been limited.

    According to insights gleaned from Nansen’s report, this restricted adoption can be attributed to a lack of demand from crypto enthusiasts, who appear to favor alternative stablecoin options. It’s suggested that PayPal’s target demographic might differ from the traditional crypto user base.

    More Data About PYUSD on Exchanges

    The presence of the stablecoin within decentralized exchanges like Uniswap has also shown modest figures. Notably, pools such as PYUSD/wETH and PYUSD/USDC indicate holdings of less than 50,000 tokens. A deeper analysis of the top individual holders of the stablecoin reveals a moderate level of interest. The largest non-exchange or non-contract holder of the stablecoin reportedly possesses less than $10,000 worth of the asset. Interestingly, this holder acquired PYUSD following the sale of three memecoins.

    Further scrutiny of the data highlights that less than 10 non-contract or non-exchange holders have balances exceeding $1,000. Despite the lukewarm initial response, it’s essential to note that PYUSD has been in circulation for less than three weeks, having been launched without any preceding announcement.

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    Anietie David

    Anietie has worked in the blockchain industry for three years, gaining experience in blockchain technology, cryptocurrencies, DeFi, and NFTs. As a seasoned content writer, he is passionate about creating effective content strategies for blockchain brands. In addition to content writing, he also has a strong interest in front-end development. When he's not working, he spends his time reading horror novels or playing CODM.

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