In a groundbreaking move that signals a convergence of traditional finance and the burgeoning crypto economy, Coinbase announced its intention to list PayPal’s stablecoin, PYUSD. This comes on the heels of Kraken’s recent addition of PYUSD trading options, marking a significant stride in the stablecoin’s mainstream adoption.
“Coinbase Assets” took to Twitter to confirm the news, stating, “Asset added to the roadmap today: PayPal USD (PYUSD). The Ethereum network (ERC-20 token) contract address for PayPal USD (PYUSD) is 0x6c3ea9036406852006290770bedfcaba0e23a0e8.”
The Ethereum network (ERC-20 token) contract address for PayPal USD (PYUSD) is 0x6c3ea9036406852006290770bedfcaba0e23a0e8
— Coinbase Assets 🛡️ (@CoinbaseAssets) August 24, 2023
However, a cautionary note was sounded in an official blog post by Coinbase: “Note: Transfers and trading are not supported for these or any other assets until a listing is officially announced. Depositing these assets into your Coinbase account before an official announcement may lead to permanent loss of funds.”
Coinbase And PayPal Joining Forces
The PYUSD stablecoin, fully backed by US dollar deposits and short-term US treasuries, was launched earlier this month by PayPal in collaboration with Paxos Trust Company. The stablecoin aims to offer a secure and stable medium for transactions in the rapidly evolving web3 environment. According to PayPal’s official press release, PYUSD is redeemable 1:1 for U.S. dollars and will soon feature a public monthly reserve report, audited by an independent third-party accounting firm.
The timing of Coinbase’s announcement is particularly noteworthy, given that just five days ago, the exchange enabled users in Germany and the UK to link their PayPal accounts for seamless crypto transactions. Daniel Seifert, Vice President and Regional Managing Director of EMEA at the crypto exchange, emphasized the strategic alignment, stated, “Coinbase’s mission of increasing economic freedom in the world means making it easier, safer and faster for customers to interact and engage with the crypto economy, reducing the frictions of the legacy banking system.”
Since its launch, PYUSD has seen a rather slow start with 40.8 million PYUSD minted with a 24-hour trading volume of $2.3 million, according to CoinMarketCap data. While Paxos and Paxos Treasury currently dominate 91.4% of the total stablecoin supply, this figure is expected to dilute as the holder base expands.
The endorsement of PYUSD by the largest American crypto exchange is a pivotal moment that bridges the gap between traditional financial systems and the digital asset landscape. With PYUSD’s underlying assets predominantly comprising short-term treasury bills and cash equivalents, the stablecoin offers a level of stability and trust that could catalyze its adoption across various financial ecosystems.
As the crypto market continues to mature, the listing of PYUSD on Coinbase is poised to have far-reaching implications, potentially challenging market leader Tether (USDT) and setting a new standard for stablecoin utility and acceptance on a global scale.
At press time, the COIN share price had retraced to the 50% Fibonacci level and was trading just below the 200-day EMA.
Featured image from Coinbase, chart from TradingView.com