August 9, 2023
By Sharan Kaur Phillora
Bitcoin saw a modest increase in value Tuesday morning in Asia, responding positively to the debut of PayPal’s new U.S. dollar-pegged stablecoin. Despite this, other leading non-stablecoin cryptocurrencies, including Ether and Dogecoin, demonstrated flat to decreased trade activity.
Here’s what we know:
PayPal’s launch of their stablecoin, the PayPal USD (PYUSD), an Ethereum-based token issued by the U.S.-based Paxos Trust Company, has brought attention back to the cryptocurrency market. Paxos also issues the BUSD stablecoin for Binance, and assures that PYUSD is fully backed by U.S. dollar deposits, short-term U.S. treasuries, and similar cash equivalents.
After a halted project due to regulatory scrutiny, PayPal’s recent action speaks to the burgeoning popularity of Decentralized Finance (DeFi). Tony Petrov, Chief Legal Officer at Sumsub, considers the PayPal’s venture into stablecoin as a significant transformation for the cryptocurrency ecosystem and emphasizes the potential impact on the global financial landscape.
However, not all cryptocurrencies experienced the same upward trend as Bitcoin. Top non-stablecoin cryptocurrencies traded lower, with Dogecoin recording a weekly loss of 5.86%. Crypto trading activities saw a dip in July, with Bitcoin, Ether, and stablecoin volumes decreasing by 13.1%, 21.9%, and 12.3% respectively.
According to research analyst Greco from Fineqia International, a Canada-based digital asset and fintech investment firm, the data highlights a period of low activity following a strong uptrend in the first half of 2023.
Nevertheless, he maintains an optimistic outlook for the year citing strong institutional interest and signs such as multiple applications for exchange-traded funds for Bitcoin and Ether in the U.S.
In further developments, crypto exchanges HashKey Exchange and OKX received licenses to offer crypto trading services to retail investors in Hong Kong, signaling further institutional acceptance of cryptocurrencies.
Despite recent turbulence, the total crypto market capitalization increased by 0.11% in the past 24 hours to US$1.16 trillion, with trading volume gaining a significant 59.07% to reach US$32.76 billion. Amidst this mixed landscape, PayPal’s foray into stablecoin serves as a significant milestone for cryptocurrency adoption and underlines the industry’s potential for growth and innovation.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
