Is PayPal’s PYUSD Stablecoin in Trouble? Market Cap Drops 30%

PayPal's stablecoin PYUSD has lost nearly 30% of its market capitalization in the past 30 days, falling from over $1 billion to $709 million as of September 26.

The decline is due to Solana’s significant reduction in its market capitalization, which on August 26 represented about 65% of the total.

PYUSD, circulating or locked within the Solana ecosystem, dropped from $662 million to $354 million, while its market capitalization on Ethereum held steady at $348 million.

However, average daily PYUSD remittance volume held steady at $242.2 million, only slightly below the previous month’s average.

While fluctuations in stablecoin market caps are common, the PYUSD drop coincided with a 1.6% rise in the overall stablecoin market, which added $3 billion.

The decrease is likely related to the decline in DeFi yields, which dropped nearly 50% on platforms like Kamino. PYUSD’s collateral yield fell from 14% in August to 7.6% as of September 24, resulting in a 30% decrease in stablecoins locked in the minutes.

Despite the decline, PYUSD remains the third largest stablecoin in Solana’s network.