LUCKNOW (CoinChapter.com) — Crypto villains don’t love the global financial hero PayPal’s stablecoin, PYUSD! Yes, PYUSD’s circulation crashed 38% in March, according to the latest ‘transparency’ report from Paxos, its issuer. Too sad, much how!
Paxos’s report shows that the total PYUSD in circulation amounted to $188.5 million in March, down 39% from the previous month, when it had topped $304 million. On the other hand, these crypto villains took their demand for stablecoin to Tether (USDT), whose market cap has been exploding throughout 2024.
PYUSD Declines Amid Crypto Market Rally
The sharp decline in PYUSD circulation during March stands out, as it occurred against the backdrop of a broader rally in the cryptocurrency market. Notably, Bitcoin (BTC) broke new all-time highs above $73,000 on March 13. This underscores the contrast between the stablecoin’s performance and the wider crypto market.
Paxos’ transparency report offers a closer look at the PYUSD stablecoin’s treasury and collateral. As of March 29, 2024, the PYUSD treasury held $14.9 million in United States Treasury bonds, with a notional value of approximately $14.8 million.
Furthermore, the report reveals that the current market value of the PYUSD collateral held in U.S. Treasury bond-collateralized reverse repurchase agreements is $177.9 million, with a notional position value of around $174 million. The total net assets of the PYUSD stablecoin amounted to $192 million, with a notional position value of $189 million.
Market Cap Hits New Highs, Then Plunges
The PYUSD market cap reached an all-time high of $312 million on February 26, 2024. However, this milestone was short-lived, as the PYUSD market capitalization has been steadily dropping since late February. Prior to this market cap plunge, the PYUSD had seen a period of sharp growth at the beginning of 2024. In just about one month, from the start of the year to mid-January, the stablecoin’s market value had doubled.
Launched in August 2023 through a collaboration between PayPal and Paxos, PYUSD was touted as a stablecoin designed for digital payments and Web3 applications. Pegged to the U.S. dollar on a 1:1 ratio, the token was backed by U.S. dollar deposits, short-term Treasurys, and other cash equivalents.
In the eight months since its launch, the PayPal USD (PYUSD) stablecoin has established itself as a major player. According to data from CoinGecko, PYUSD surpassed established rivals such as Paxos’ Pax Dollar (USDP) and the Gemini Dollar (GUSD). Additionally, it became the 13th largest stablecoin by market capitalization.
Despite its initial success, the latest data suggests that PYUSD may be facing challenges ahead. With a current market capitalization of $194 million, the token trails behind industry giants like Tether’s USDT, which boasts a market value of over $106 billion.
