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In a groundbreaking move, Huobi, one of the world’s premier cryptocurrency exchanges, has announced its support for PayPal USD (PYUSD). But that’s not all – in a surprising twist, Huobi also plans to list the PYUSD/USDT trading pair with permanent zero fees.
Huobi Becomes The First To Support PYUSD Stablecoin
On Monday, PayPal made a pioneering move as the premier online payment platform by introducing a stablecoin tied to the U.S. dollar: PayPal USD (PYUSD). This announcement led to a nearly 2% rise in its shares, a remarkable feat especially considering the volatile crypto landscape and a previous six-year low in PayPal’s stock due to a decline in consumer spending the previous year.
Following this news, several crypto exchanges are now extending their support for this stablecoin and it could be a breakthrough in the US market and its crypto community. Recently, Huobi became the first exchange to list the PYUSD stablecoin. Adding to the anticipation, the platform will introduce the PYUSD/USDT trading pair with an exclusive permanent zero fee structure. As soon as the stablecoin achieves the required liquidity after its market debut, trading is expected to kick off without delay.
Issued by Paxos trust, the token based on Ethereum will shortly be accessible to PayPal users in the U.S. They will have the capability to transfer PYUSD between PayPal and compatible digital wallets, utilize the tokens for purchases, and switch between PYUSD and other cryptocurrencies supported by PayPal.
The unveiling of PYUSD on Ethereum was met with mixed reactions. While some saw it as a pivotal moment for the protocol, others raised concerns about the high transaction costs associated with Ethereum.
Critics pointed out that instead of using Ethereum’s mainnet, there were numerous other options that could have been more cost-effective. In relation, a web3 enthusiast commented that such a decision made even the high fees of certain platforms seem minimal compared to Ethereum’s gas costs.
PayPal itself hinted at the potential of experiencing elevated fees outside its platform, stating, “Be aware when purchasing PYUSD; prices and fees might vary if procured outside of PayPal.”
Paxos has revealed the contract address for PayPal’s stablecoin, PYUSD that has a current supply of 26.9 million.
Chain data indicates that Paxos initially minted 1.1 million PYUSD in November 2022 and proceeded with several smaller transfer trials. On February 1, 2023, an additional 26.4 million tokens were minted. A significant burn of 25.5 million PYUSD occurred on February 23, and then on August 3, another 24.9 million PYUSD were minted.
Huobi’s Announcement Comes Amidst Rumors Of Insolvency
Recently, Huobi has seen a substantial decline in its stablecoin reserves, following rumors regarding the potential detention of its top executives in China. Reports suggest a 40% reduction in the stablecoin holdings on the exchange, with traders pulling out more than $60 million worth of stablecoins in the past week.
Justin Sun, the brains behind the well-known blockchain Tron, has called for the public to dismiss rumors suggesting that crypto exchange Huobi is in hot water after alleged detentions of its key personnel.
These speculations seem to be a central reason behind the massive withdrawals from the exchange over the weekend. Meanwhile, Tron’s Total Value Locked (TVL) has dipped to under $2.5 billion. In response to this, Justin Sun recently transferred 200 million USDT from JustLend to Huobi. Subsequently, Huobi’s USDT holdings saw a jump, moving from approximately $85 million to a present value of $285 million.
In the midst of all this turmoil, Huobi’s recent decision to list PYUSD comes as a surprise. As the platform experiences an exodus of funds, this move might be more strategic than meets the eye. The exchange, in all likelihood, is looking to shift the narrative, regain user confidence, and capitalize on the current buzz surrounding PYUSD. The listing could potentially draw back traders and stabilize their tumbling stablecoin reserves.