In March, the issuance of stablecoins by payment giant PayPal and cryptocurrency firm Paxos witnessed a significant decline, as revealed by Paxos' latest PayPal USD Transparency Report. The circulation of PYUSD dropped by 39% from February, totaling $188.5 million for the month. This downturn follows higher circulation figures of $304 million and $301 million in February and January, respectively.
As of March 29, PayPal's U.S. Treasury holdings included $14.9 million in U.S. Treasuries, with a nominal value of around $14.8 million. The current market value of PYUSD collateral in the U.S. Treasury collateralized reverse repurchase agreement stands at $177.9 million, with a notional position value of approximately $174 million. Total net assets amount to $192 million, with a notional position value of $189 million. This comes amidst a decline in PayPal's USD market capitalization since late February, following a peak of $312 million on February 26, according to CoinGecko.
Despite experiencing dramatic growth earlier in 2024, doubling its market cap within about a month by mid-January, PYUSD has seen a decline in circulation. Its current market capitalization stands at $194 million, with a modest 3% increase over the past seven days. Interestingly, this decline in circulation contrasts with the broader cryptocurrency market rebound, notably highlighted by Bitcoin's surge to a new all-time high of $73,000 on March 13.
Launched in August 2023 in collaboration with Paxos Trust, PayPal USD stablecoin was touted for its suitability for digital payments and Web3. PYUSD maintains a 1:1 peg to the U.S. dollar and is backed by U.S. dollar deposits, short-term Treasury bills, and other cash equivalents. Despite being in existence for only eight months, PYUSD has rapidly ascended to become the dominant stablecoin, ranking as the 13th largest by market capitalization, surpassing Paxos' Pax Dollar (USDP) and Gemini Dollar (GUSD), according to CoinGecko.
