PayPal’s USD Stablecoin Circulation Decreased by 38% in March

A latest report shared a price analysis of PayPal-issued stablecoin. As per the article, PayPal a digital payment platform, issued a new stablecoin recently with a total circulatory supply of $188.5 million as of March this year.

According to the analysts, this amount dropped by 38% in comparison to February for the same year. The firm issued the stablecoin in association with Paxos.

Paxos’s Report on PYUSD

Paxos officials published a transparency report regarding the exorbitant decline in the circulated amount of PYUSD. This report suggests that during the first two months of the current year, PayPal USD circulation printed new highs of $304 million and $301 million respectively.

However, by 29th March PayPal issued stablecoin added $14.9 to its backing reserves in the form of US Treasury bonds.  

The existing market value of the PYUSD collateral in the form of the US Treasury bond is said to be around $177.9 million. Meanwhile, its notional value is estimated to be around $174 million.

On the other hand, the total net asset value of the same stablecoin is projected to be around $192 million with a notional position evaluation of $189 million. The PYUSD market cap has consistently dropped since February after reaching an ATH of $312 million on 26th February as per CoinGecko metrics.

Important Changes in the Total Circulatory Supply of PayPal Stablecoin

The stablecoin underwent a sharp growth in the first month of 2024 with the market value ballooning to double for the same month. The PYUSD market capital is currently valued at $194 million and has experienced a 3% increase in the corresponding week of the publication of the article in question.

This recent decline in the total circulated amount of PYUSD was noted regardless of the rally in crypto markets with Bitcoin reaching a new market top of $73K.

The digital payment giant launched the stablecoin in August 2023 and dedicated it to digital payments and Web 3.0 projects. The product was pegged with the USD at a 1:1 ratio and backed by USD deposits, Treasury notes, and other types of cash equivalents.

Only 8 months after its launch, PYUSD emerged as a major stablecoin and gained a ranking of top 13th stablecoin in terms of market cap.

This ranking overtook other stablecoins issued by Paxos namely Pax Dollar (USDP) and Gemini Dollar (GUSD) as per data projections from CoinGecko.  

Right now this stablecoin accounts for only 0.18% of the USDT stablecoin and boasts around $106.6 billion market cap at press time. The comprehensive market cap of the stablecoin market is currently standing at $155 billion.

Controversial Stablecoin Bill

Coin Center, a cryptocurrency advocacy group, recently raised objection against the algorithmic stablecoin ban. The group claims that the bill in question has the potential to present constitutional challenges in the country.

As per Cointelegraph, a bill intending to ban algorithmic stablecoins was recently presented in the Senate. The subject matter of the bill will establish a regulatory framework and serve as guardrails for stablecoin-based payments.

Coin Center published a notification as of 19th April claiming that the Lummis-Gillibrand Payment Stablecoin Act that was presented by Sen. Kristen Gillibrand and Sen. Cynthia Lummis can be a disparaging underline for a policy creation.

The group postulates that imposing a ban on stablecoins can be interpreted as a direct violation of the First Amendment. Coin Center stated that it is logical for projects like Terra to register with the SEC and proceed with mandated disclosures.

However, such a practice has the potential to make stablecoin infeasible by design. However, bringing an outright ban on the business model is deemed unnecessary and anti-innovation. The group further stated that if compliance with security regulations after bringing a product in the marketplace.

Coin Center executive director Jerry Brito noted that striving to generate regulations for stablecoins is a laudable effort but the next stablecoin bill will allow issuers to publish a USD-backed stablecoin only.