PayPal USD (PYUSD), the stablecoin associated with the American financial technology giant PayPal Holdings Inc. is exploring an avenue to get integrated into the decentralized lending protocol Aave.

PayPal Stablecoin Eyes DeFi Embrace

PayPal stablecoin was launched in August as the company that embraced crypto trading a couple of years back sought to deepen its foothold in the digital currency ecosystem. While the PayPal stablecoin got the much-desired embrace at launch, its traction has waned in recent times.

At the moment, data from DeFiLlama positions PayPal Stablecoin on Ethereum (ETH) as the 11th largest stablecoin with a $243.28 million market capitalization. This figure comes as a fraction of the more than $93.7 billion of the market capitalization of the largest stablecoin, Tether (USDT).

To change its fortune, PayPal is looking to extend its reach into the wider and more liquidity-rich Decentralized Finance (DeFi) and Aave is the next target. According to reports, there is an ongoing DAO vote on Aave at the moment which is scheduled to end on January 11. Should the vote finally pass as expected, it will place Aave as the latest DeFi lending protocol after Curve to host the PayPal stablecoin.

Despite the importance that PayPal is attaching to the PYUSD stablecoin, there is no actual evidence that the fintech giant is using the token as a means of accepting payment from merchants the way it has found deep utility for Bitcoin (BTC), and Ethereum (ETH) among other assets hosted on the platform.

PayPal Eyes New Market Direction

PayPal’s entry into the DeFi world is coming at a time when the market is gearing up for a significant shift in liquidity through the potential launch of a spot Bitcoin Exchange-Traded Fund (ETF) product.

The fintech giant is looking to reposition itself and its stablecoin in line with the new major revolution that is coming to the crypto ecosystem. 

While it currently has the first-mover advantage with the launch of its stablecoin, its traction shows it has a much longer way to go before it can mount a formidable competition with existing alternatives like USDT and USD Coin (USDC) amongst others.

The post PayPal USD (PYUSD) Stablecoin Eyes Integration on Aave Protocol appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am