Better Stablecoin Buy: PayPal USD vs. Ripple USD
Key Points
PayPal USD (CRYPTO: PYUSD) and Ripple USD (CRYPTO: RLUSD) are not the largest stablecoins on the market. As of this writing on Nov. 13, their respective market caps of $3.4 billion and $1.0 billion look like rounding errors next to USDC's (CRYPTO: USDC) $75.5 billion and Tether's (CRYPTO: USDT) $184.0 billion.
They are refreshingly different from the usual big-name stablecoins, each with unique features and limitations. So, if you're looking for a lesser-known stablecoin to buy, which is the better choice right now?
Where can you actually buy these stablecoins?
One of these coins may be easier to buy depending on which crypto-trading service you're using. The big players like Tether and USDC are available on most platforms. PayPal USD and Ripple USD are not as universally accessible.
For instance, my Coinbase (NASDAQ: COIN) account only provides information on Ripple USD without the option to buy. "Ripple USD is not tradable on Coinbase," the service says. Coinbase does support trading PayPal USD but won't pay any interest-like rewards on those holdings.
Searching for PYUSD or RLUSD on Robinhood (NASDAQ: HOOD) doesn't yield basic information. Kraken allows access to both, but again, without reward payouts. At Uphold, they can be bought but don't earn interest.
PayPal's home turf advantage
If you want a full-featured PayPal USD holding, buying it in your PayPal (NASDAQ: PYPL) account is recommended. It may take some time to find "crypto" in the PayPal dashboard, but once you do, you'll find PYUSD trading options. The coin earns 4% a year in this account. PayPal offers only seven cryptocurrencies, with PayPal USD as an option.
Ripple's stablecoin, available in over two dozen crypto exchanges, is intended for smoother trading of Ripple's XRP (CRYPTO: XRP) token. The group is working on a yield-generating staking system, but it is not ready yet. Wherever you go, XRP's stablecoin cousin won't earn any interest payouts.
Investment versus infrastructure
RLUSD is backed by cash reserves and can be exchanged for an equal amount of U.S. dollars anytime. Its tokens move across the Ethereum and XRP blockchain networks, making it ideal for sending cash across international borders. There's no strong reason to buy and hold it as an investment until yield features are completed.
PYUSD, slightly different, also offers cash backing and dollar redemption. It was originally an ERC-20 token on the Ethereum network and has expanded to more trading networks. Holding PYUSD coins in your PayPal wallet earns a 4% interest. Transfer fees are zero for PYUSD coins on PayPal's Venmo or the PayPal cash-transfer service. There are no fees for PYUSD transfers on the Solana blockchain when venturing outside PayPal.
I'd honestly prefer to make money on my stablecoin holdings
There are solid reasons to hold PYUSD coins instead of dollars in your PayPal account. A 4% annual yield and fee-free transfers could be beneficial.
A clear winner is evident, even if both coins remain pegged to the $1.00 price point. It makes financial sense to own PayPal USD for its benefits, while RLUSD is better suited for its role in RippleNet and XRP transactions. If you don't notice using it, RLUSD is doing its job.
Should you invest $1,000 in PayPal USD right now?
Before buying PayPal USD stock, consider this:
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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time, you’d have $599,784! Or when Nvidia made this list on April 15, 2005... the same investment would yield $1,165,716!
Stock Advisor’s total average return is 1,035%, a much higher performance compared to 191% for the S&P 500.
This article has been published in fool.com via Yahoo News.
