The Rise of PayPal's Stablecoin

PayPal currently ranks 4th among the top stablecoins in circulation and it is growing fast.

November 13th, 2023

While PayPal has a long way to go in order to catch Circle's USDC, 4th place isn't too shabby.

Given PayPal's size and distribution capabilities, its not a stretch to see the legacy institution compete for the top spot. Especially when looking at PayPal's 32% growth rate in the last month. I think it is highly unlikely PayPal is stealing market share from USDC or the rest of the ecosystem, which means its growth is driving net new stablecoin users.

Another legacy brand to keep an eye on is VISA, who launched their stablecoin shortly after PayPal.

Viewing Web3 through the lens of a brand or marketer, what piques my interest is how both PayPal and VISA are laying critical foundations for brands to operate in Web3.

Brands need to hold and use crypto assets in order to truly operate in Web3. It is certainly possible for brands to offload the financial aspects to a partner, however this is a short term strategy. At some point, every brand marketing team will need access to a basket of stablecoins for operations.

There's no doubt that PayPal and VISA's presence in the space will give senior leadership within brands the confidence to invest heavily in Web3 initiatives.

That said, we're going to need to see how the SEC's investigation of PayPal's stablecoin plays out. The SEC is investigating whether or not PYUSD is a security.

In Austin's tweet below, he says something very interesting that caught my eye.

"...if PYUSD is a security, so are Starbucks gift cards, prepaid debit cards, and airline reward points."

Closing thoughts

If PayPal and VISA's stablecoin's survive, which I think they will, then three things will happen:

  1. 1. A billion people could be using stablecoins by 2024-2025

  2. 2. Brands will feel much more comfortable investing in Web3 initiatives as they will now have a critical tool that's needed to operate within the space

  3. 3. We could see the rise of branded stablecoins. That is, imagine if you could redeem a portion of your Starbucks points and swap them out for Starbuck's stablecoins?

I need to write a longer thought piece about branded stablecoins, and the pro's and con's. If you have any early thoughts on the matter, please leave a comment and let me know what you're thinking!

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