Despite PayPal’s recent earnings report being relatively quiet about cryptocurrency, CEO Alex Chriss mentioned during a call with analysts on Tuesday morning that utilizing the company’s stablecoin, PYUSD, for international payments is an area where they see promising economic potential and market growth.
Chriss’s remarks followed PayPal’s announcement earlier this month that its cross-border money transfer service, Xoom, would permit customers to send PYUSD abroad without fees.
Although PayPal became the first major financial services firm to introduce its own stablecoin last August, it did not specifically break down earnings related to cryptocurrency in its Q1 8-K filing. However, the company experienced overall growth, attributed to increased usage of the PayPal wallet by users. Year-over-year transaction volume rose by 14% to $403.9 billion, surpassing analysts’ expectations. With a 13% increase in transactions per active user, net revenue reached $7.7 billion, up 9% from the previous year.
Currently, PYUSD ranks as the 11th largest stablecoin by market capitalization, exceeding $327 million according to CoinGecko data. Following the announcement of the Xoom fee waiver, PYUSD’s market cap surged by over 70%, surpassing its peers. For example, Ethana’s USDe, which became the fastest stablecoin to reach $2 billion in crypto history, has grown by about 50%.
The limited mention of PYUSD in reports could be attributed to uncertainty surrounding the U.S. regulatory environment. According to Boaz Sobrado, a fintech analyst at Capital.com, regulators are cautious about drawing attention to themselves and may aim to set examples with market participants.
While Chriss highlighted the company’s long-term remittance strategy, current token popularity may be driven by the passive income they generate from tokenizing U.S. Treasuries.
Chriss assumed the role of CEO in September, and though he hasn’t previously discussed cryptocurrency publicly, he appears to hold a positive stance. He tweeted about selling Bitcoin in 2013 and still maintains a link to an Ethereum wallet in his Twitter bio, holding approximately $90 worth of Ether. Under Chriss’s leadership, PayPal also disclosed a $5 million investment in PYUSD into Mesh, a crypto startup facilitating digital asset transfers.
The company expects earnings per diluted share to be around $3.65 for the remainder of 2024, compared to $3.84 last year, which included gains from selling portions of the investment portfolio and Happy Returns, a firm facilitating consumer returns. PayPal shares remained largely unchanged on Tuesday but have seen a more than 10% increase this year.
Chriss stated in a statement accompanying the quarterly financials that 2024 remains a transition year for the company, focusing on executing key strategic initiatives, achieving cost savings, and reinvesting appropriately to ensure consistent, high-quality profitable growth.
