“Stablecoin Wars” Heat Up As PayPal Enables PYUSD For Cross-Border Transfers

The stablecoin wars are heating up after PayPal announced today that it will enable PYUSD for U.S. customers sending money across borders.

PayPal’s cross-border money transfer service Xoom will allow U.S. based customers to convert USD into the firm’s stablecoin, PYUSD, and send to residents in 160 countries.

According to today’s press release, there will be no transaction fees associated with sending the funds

"Enabling U.S. users of Xoom the option to fund cross-border money transfers using PYUSD builds on our goal of driving mainstream adoption of cryptocurrencies while also offering an easy way to securely send money to friends and family at a lower cost,” said Jose Fernandez da Ponte, who leads PayPal’s blockchain team.

Bidding to capture a growing stablecoin market, and position itself as a TradFi player that operates in DeFi, PayPal launched its stablecoin, PYUSD, in August, 2023. After growing to a high of $290 million in market capitalization in January, it has fallen to a market cap of $190 million, sitting in 12th place on Coingecko’s stablecoin category.

Ripple Joins Race

PayPal’s move comes as Ripple joins the stablecoin use-case.

The company behind XRP announced today a new U.S. pegged stablecoin on the XRP Ledger and Ethereum blockchain. According to the firm, the new stablecoin will be 100% backed by US dollar deposits, short-term US government treasuries, and other cash equivalents.

“A high-quality USD stablecoin on the XRPL – with its decentralized exchange and features like issued currencies, auto-bridging (that uses XRP as the native currency to facilitate trades between other assets), and the AMM — will be a gamechanger for users and devs,” wrote Ripple’s CTO, David Schwartz today on X.

Ripple and PayPal are also joined by Ethena Labs’ controversial USDe, which has soared to a $1.3 billion market cap in less than two months since launching on Feb. 21.

Dethroning the top stablecoins will not be an easy feat, however.

The top two stablecoins, USDT and USDC, control more than 90% of the $154 billion sector’s market cap, as per data from Coingecko, both showing no signs of giving up market share any time soon. The two heavy-weights’ market caps have actually increased versus their smaller competitors this year.