Recent on-chain data reveals that PayPal’s newly issued stablecoin, PayPal USD (PYUSD), is facing challenges in gaining traction. According to findings from blockchain analytics company Nansen, around 90% of PYUSD is currently held in the wallet of stablecoin issuer Paxos Trust.
Reportedly, the holdings on cryptocurrency exchanges’ wallets make up nearly 7% of the total supply, with balances on Kraken, Gate.io, and Crypto.com. The allure of so-called “smart money” investors – a term used to describe knowledgeable or professional investors – is not significant.
The launch of PayPal’s stablecoin in early August had raised expectations within the cryptocurrency industry. At that time, it was believed that the stablecoin would drive wider adoption and introduce cryptocurrency to the masses for the first time. Despite the financial technology giant boasting over 350 million users worldwide, only a small portion have used or held the stablecoin in their self-custodied wallets in the initial weeks. According to the report, the figures indicate that:
Externally, cryptocurrency users seem to lack demand for PYUSD due to other alternative choices (possibly because PayPal targets a different demographic group).
Pools on decentralized exchanges like Uniswap for PYUSD/wETH and PYUSD/USDC account for less than 50,000 tokens. A deeper analysis of the top individual holders reveals moderate interest, with the largest holder not being an exchange or contract, holding PYUSD worth less than $10,000. According to Nansen, this holder bought the stablecoin after selling three memecoins.
Furthermore, data shows that fewer than 10 owners, excluding contracts or exchanges, have balances exceeding $1,000.
Despite modest consumption, PYUSD has only been in circulation for less than three weeks. It was launched without any prior announcement of its deployment.