PayPal's PYUSD challenges USDC and USDT in the $320B stablecoin race
A new report from ARK Invest examines the dominance of fiat-backed stablecoins in the US market. The study highlights how these digital assets now make up over 85% of the $313 billion stablecoin supply. It also explores the rapid rise of PayPal's PYUSD as a challenger to the long-standing leaders, USDC and USDT.
The analysis, part of ARK's ongoing research, focuses on three major stablecoins: USDC by Circle, USDT by Tether, and PYUSD by PayPal. Together, USDC and USDT control the bulk of the market, forming a near-duopoly. Their combined dominance overshadows newer entrants, despite recent growth in the sector.
PYUSD has seen remarkable expansion since its August 2023 launch. By March 2026, its market capitalisation reached between $4 and $4.1 billion, placing it among the top 25 cryptocurrencies and seventh among stablecoins. This surge outpaced early forecasts, though it remains far behind USDC and USDT, which continue to lead the $320 billion stablecoin industry. PayPal's push into 68 to 70 countries, along with integrations like Xoom for cross-border payments, has fuelled PYUSD's adoption. Partnerships with platforms such as Bybit have also boosted its institutional appeal. The report evaluates these stablecoins across five key areas: transparency, durability, sovereignty, accessibility, and incentives. The GENIUS Act further cements the role of fiat-backed stablecoins by restricting US issuers to majority-collateralised options. This regulatory shift reinforces the position of USDC, USDT, and PYUSD as the primary choices for compliant digital dollar alternatives.
The study underscores how USDC and USDT maintain their grip on the stablecoin market, even as PYUSD gains traction. With regulatory backing and growing adoption, these assets are set to shape the future of digital payments. Their combined market share and institutional support suggest continued dominance in the years ahead.
