PayPal’s PYUSD vs. Circle’s USDC

PayPal recently announced the launch of its own stablecoin, PayPal USD (PYUSD). This article is a deep dive comparison of PYUSD vs. USDC.

PayPal recently announced the launch of its own stablecoin, PayPal USD (PYUSD), which is built on the Ethereum blockchain in collaboration with Paxos. This stablecoin will be used primarily on the PayPal platform, as well as on Venmo, a social payments service owned by PayPal. One of the main features of PYUSD is that it can be converted to and from other cryptocurrencies available on the PayPal platform, and can also be transferred to a PayPal or external account.

In contrast, Circle has been offering its own stablecoin, USD Coin (USDC), since 2018. Like PYUSD, USDC is built on the Ethereum blockchain, and is also fully backed by U.S. dollars held in reserve accounts 1. USDC is designed to be used primarily on the Circle platform, and can also be converted to and from other cryptocurrencies available on the Circle platform, as well as transferred to a Circle or external account.

| High-level differences

One of the main differences between PYUSD and USDC is in their development. PYUSD was developed in collaboration with Paxos, while USDC was developed by Circle. Both companies are well-known in the crypto space and have been around for several years, but their approaches to stablecoin development differ slightly. For example, PYUSD intends to publish monthly public attestations issued by an independent third-party accounting firm and conducted per standards set by the American Institute of Certified Public Accountants (AICPA). This is in contrast to USDC, which is regularly audited by Grant Thornton, LLP, an independent accounting firm, to verify that the number of USDC tokens in circulation is fully backed by a corresponding number of U.S. dollars held in reserve.

Another difference between PYUSD and USDC is in their intended use. PYUSD is designed primarily for use on the PayPal platform and Venmo, while USDC is designed primarily for use on the Circle platform. This means that PYUSD may be more appealing to PayPal and Venmo users, while USDC may be more appealing to Circle users.

| How stable are these stable coins?

In terms of stability, both PYUSD and USDC are designed to be stablecoins, which means they are pegged to the U.S. dollar and are meant to maintain a stable value over time. This is achieved by backing each coin with a corresponding amount of U.S. dollars held in reserve accounts. However, it is worth noting that stablecoins are not immune to price fluctuations, and may be subject to the same risks as other cryptocurrencies.

Overall, both PYUSD and USDC are Ethereum-based stablecoins that are fully backed by U.S. dollars and use smart contracts that allow for freezing and seizure of coins. However, there are some differences in their development, auditing, and intended use that may make one more appealing than the other depending on the user’s needs. For example, PYUSD’s collaboration with Paxos and monthly public attestations may make it more appealing to users who are concerned about transparency and accountability, while USDC’s regular audits by an independent accounting firm may make it more appealing to users who prioritize stability and security.

| Transparency and regulation

Both PYUSD and USD Coin are regulated by financial authorities. For example, PYUSD is regulated by the New York State Department of Financial Services (NYDFS) and USD Coin is regulated by the US Treasury Department. This means that both stablecoins must follow certain regulations and guidelines to ensure transparency and security.

| Fees and transaction speeds

One of the main advantages of stablecoins over traditional payment methods is their low fees and fast transaction speeds. Both PYUSD and USD Coin offer low transaction fees compared to traditional payment methods. However, USD Coin has a slightly faster transaction speed compared to PYUSD. This may be an important factor for users who require fast transaction times

| Conclusion

In conclusion, stablecoins are becoming an increasingly popular option for users who want to hold cryptocurrency without being exposed to the price volatility of other cryptocurrencies. Both PYUSD and USDC are designed to provide a stable value over time, and can be used on their respective platforms to make transactions with ease. As with any investment, it is important for users to do their own research and consider their own needs and risk tolerance before deciding which stablecoin to use.

PYUSD: — Developed in collaboration with Paxos — Built on the Ethereum blockchain — Fully backed by U.S. dollar deposits, U.S. treasuries, and other cash equivalents — Smart contracts allow for freezing and seizure of coins — Intends to publish monthly public attestations issued by an independent third-party accounting firm and conducted per standards set by the American Institute of Certified Public Accountants (AICPA)— Can be converted to and from other cryptocurrencies available on the PayPal platform — Can be transferred to a PayPal or external account — Venmo, a social payments service owned by PayPal, will also adopt the new stablecoin

USDC:— Developed by Circle — Built on the Ethereum blockchain — Fully backed by U.S. dollars held in reserve accounts— Smart contracts allow for freezing and seizure of coins — Regularly audited by Grant Thornton, LLP, an independent accounting firm, to verify that the number of USDC tokens in circulation is fully backed by a corresponding number of U.S. dollars held in reserve — Can be converted to and from other cryptocurrencies available on the Circle platform — Can be transferred to a Circle or external account— Market Cap of $26.47B