Although PayPal’s latest earnings report was largely quiet on crypto, CEO Alex Chriss said on a call with analysts Tuesday morning that using the firm’s stablecoin, PYUSD, for cross-border payments is one of the areas “where we believe there are compelling unit economics and market upside.”
The comments come after PayPal’s announcement this month that Xoom, its cross-border money transfer service, will allow customers to send PYUSD abroad with zero fees.
Despite becoming the first large financial services company to launch its own stablecoin last August, the company didn’t delineate crypto-related earnings in its Q1 8-K filing, which showed that PayPal grew across the board. The positive results stemmed from more users making payments with the PayPal wallet, with total year-over-year volume up 14% to $403.9 billion, topping analysts’ estimates. With the number of transactions per active user up by 13%, net revenue reached $7.7 billion, up 9% from a year ago.
PYUSD is the 11th-largest stablecoin by market capitalization, at over $327 million, according to CoinGecko data. Since announcing the Xoom fee waiver, PYUSD’s market cap has grown by more than 70%, rapidly outpacing peers. For instance, Ethana’s USDe, the fastest stablecoin to reach $2 billion in crypto history, has grown about 50%.
One reason for PYUSD’s minimal mention could be uncertainty around the U.S. regulatory landscape. “Regulators are keen to make an example with market participants. They do not want to draw attention to themselves,” Boaz Sobrado, a fintech analyst, told Fortune in a note. And while there’s been market cap growth, support for low-fee blockchains is lacking, meaning that there’s been little organic remittance adoption, he added.
Indeed, while Chriss emphasized the company’s long-term remittance strategy, the tokens currently may prove more popular due to the passive income they generate from tokenizing U.S. Treasuries.
Chriss took over as CEO last September and while he hasn’t publicly spoken about crypto before, he appear fairly bullish. He tweeted “I just sold 2 bitcoin with @Coinbase! best ROI EVER!!!!!!!!” in 2013 and still has a link to an Ethererum wallet in his X bio that holds about $90 worth of Ether. Under Chriss, PayPal also announced in January it had invested $5 million worth of PYUSD into Mesh, a crypto startup that helps users move digital assets.
The firm is expecting earnings per diluted share to be about $3.65 for the remainder of 2024, compared with $3.84 last year, when it included gains from selling some of the company’s investment portfolio, and Happy Returns, a firm that helps consumers return unwanted items. PayPal shares were mostly flat on Tuesday but are up more than 10% this year.
“2024 remains a transition year and we are focused on execution—driving our key strategic initiatives, realizing cost savings, and reinvesting appropriately to position the company for consistent, high-quality profitable growth,” Chriss said in a statement accompanying the quarterly financials.
