PayPal USD (PYUSD) — a stablecoin issued by the payment giant PayPal and the cryptocurrency company Paxos — saw a significant circulation drop in March.
According to Paxos’ latest PayPal USD transparency report, PYUSD circulation amounted to $188.5 million in March — 39% less than in February.
In February and January, PayPal USD circulation topped at $304 million and $301 million, respectively.
As of March 29, PayPal USD treasury included $14.9 million in United States Treasury bonds, with a notional value of around $14.8 million.
The current market value of PYUSD collateral in the U.S. Treasury bond-collateralized reverse repurchase agreements is $177.9 million, and the notional position value is approximately $174 million. The total net assets amounted to $192 million, with the notional position value of $189 million.
PayPal USD market capitalization has been dropping since late February after reaching all-time high levels of $312 million on Feb. 26, according to data from CoinGecko.
The stablecoin saw some sharp growth at the beginning of 2024, with its market value doubling in just about one month by mid-January.
At the time of writing, PYUSD's market capitalization amounted to $194 million, up around 3% in the past seven days.
The drop in PYUSD circulation came despite a rally in cryptocurrency markets, with Bitcoin (BTC) breaking all-time highs above $73,000 on March 13.
Cointelegraph approached Paxos for a comment regarding the drop in PYUSD circulation but has yet to receive a response.
Related: Tether completes ‘gold standard’ security audit
PayPal launched the PayPal USD stablecoin in collaboration with Paxos Trust in August 2023, promoting it as being designed for digital payments and Web3. Pegged to the U.S. dollar on a 1:1 ratio, PYUSD is backed by U.S. dollar deposits, short-term Treasurys and other cash equivalents.
Eight months after launch, PYUSD has emerged as a major stablecoin, ranked the 13th largest stablecoin by market capitalization, beating Paxos’ Pax Dollar (USDP) and Gemini Dollar (GUSD), according to CoinGecko.
PYUSD’s market value accounts for just 0.18% of Tether (USDT) stablecoin, which boasts a $106.6 billion market value at the time of writing. The total market capitalization of all stablecoins amounted to $155 billion at the publishing time.