PayPal Coin is just a step away from reaching a market capitalization of 1 billion USD

With the cryptocurrency PYUSD, the payment service provider PayPal successfully entered the crypto industry a few months ago. It can now be said that the venture was a complete success, as market cap is rapidly approaching the 1 billion USD mark. But what exactly is the PayPal Coin, and what can we expect from it in the coming months?

PayPal Coin – What’s behind it?

A multitude of cryptocurrencies share a common problem: volatility. Due to high volatility, sometimes reaching double-digit percentages, it is difficult to use cryptocurrencies as a means of payment. A welcome alternative to this are the so-called stablecoins, which are pegged to a fiat currency. The basis for this can be virtually any fiat currency, but the most popular is the US dollar. The most well-known stablecoin in this context is US Tether (USDT), with a market capitalization of around 117 billion US dollars, making it the third-largest cryptocurrency.

PayPal Coin is also a stablecoin that uses a fiat currency as its basis, in this case, the US dollar. The payment service provider PayPal introduced the stablecoin in the USA in early August 2023, creating the possibility to transfer money quickly and free of charge to more than 160 countries worldwide. Initially launched on the Ethereum blockchain, the Solana blockchain was added this spring, significantly changing the situation. One reason for the addition of the Solana blockchain was scalability, which is severely limited on Ethereum. With 416 million customers worldwide, high scalability is virtually essential.

Solana as a Success Factor – Where is the Journey Heading?

Since the PayPal token became compatible with the Solana blockchain, growth has significantly changed, heading upwards. In the last month alone, the market cap of the stablecoin has grown by around 300 million US dollars, bringing the 1 billion US dollar mark ever closer. Currently, the market capitalization is 870 million US dollars, making it the sixth-largest stablecoin by market capitalization. But why has interest in the coin increased significantly since it became compatible with the Solana blockchain?

The growth surge is partly due to the fact that since becoming compatible with Solana, the stablecoin can be staked on platforms like Kamino and Drift for double-digit annual returns. This makes the PYUSD token strongly reminiscent of Terra, the stablecoin that lost its peg to the US dollar in 2022 and plummeted in value. However, it should be noted that behind every PYUSD token is a real US dollar. A plunge into worthlessness is practically ruled out due to the 1:1 backing. Many experts and analysts are already certain that the PayPal token will become one of the most important in the crypto market in the future.