PayPal USD earns 4% annual interest when held in PayPal accounts, while Ripple USD does not currently offer any yield-generating features.
PayPal USD works best within PayPal’s own ecosystem with free transfers on Venmo and PayPal, as well as no-fee Solana blockchain transfers.
Ripple USD does its job best when you don’t even notice you’re using it during quick and easy RippleNet transactions.
10 stocks we like better than PayPal USD ›
PayPal USD(CRYPTO:PYUSD) And Ripple of the dollar (CRYPTO: RLUSD) are not the largest stablecoins on the market. As of this writing, November 13, their respective market caps of $3.4 billion and $1.0 billion look like rounding errors next to USDCIt is (CRYPTO: USDC) $75.5 billion and AttachedIt is (CRYPTO: USDT) $184.0 billion.
But they are pleasantly different from the usual big-name stablecoins. Each comes with a few unique features and limitations. So if you’re looking for a lesser-known stablecoin to buy, which one is the best choice right now?
First, one of these coins may be easier to purchase than the other. It depends on the crypto trading service you use.
Big dogs like Tether and USDC are available on almost every popular platform, alongside popular non-stablecoins such as Bitcoin And Dogecoin. PayPal USD and Ripple USD are not universally available everywhere.
For example, my Coinbase (NASDAQ:COIN) The account provides information only on Ripple USD, with no buy buttons in sight. “Ripple USD is not tradable on Coinbase,” the service states. Coinbase supports trading PayPal USD, but will not pay any interest-type rewards on these holdings.
Searching for PYUSD or RLUSD on Robin Hood (NASDAQ:HOOD) won’t even give me a search result with basic information. Kraken gives me access to both but, again, without those nice rewards. Same story with Uphold: I can buy them but I don’t earn interest. Yeah, call me a nerd – I have several different crypto trading accounts.
If you want a full PayPal USD credit, you must of course purchase it in your Paypal(NASDAQ:PYPL) account. It can take a minute to find “crypto” in the PayPal dashboard menu system, but when you finally click on it, your screen fills up with information about PYUSD trading options. And the coin will earn 4% per year on this account. The service only offers seven cryptocurrencies, but PayPal USD is absolutely an option.
Ripple’s stablecoin is available at over two dozen crypto exchanges, but it’s really meant to make Ripple trading easier. XRP(CRYPTO:XRP) token. The group is working on a yield-generating staking system, but it is not yet ready for prime time. Wherever you go, XRP’s stablecoin cousin won’t earn you any interest.
RLUSD is backed by cash reserves and can be exchanged for an equal amount of US dollars at any time. His tokens move across the Ethereum and the XRP blockchain networks. It’s the perfect tool for sending money across international borders, and not much else. This coin provides liquidity and fast execution of RippleNet transactions in tandem with the XRP coin.
There’s really no reason to buy it and hold it as an investment, at least not until these impending return characteristics are over.
PYUSD is slightly different. Its cash guarantee and dollar redemption features are the same, but that’s it. It was originally an ERC-20 token on the Ethereum network and several other trading networks were added over time. You will earn 4% interest by holding PYUSD coins in your PayPal wallet. There are no transfer fees if you send PYUSD coins to PayPal’s Venmo or PayPal’s money transfer service. And if you insist on venturing outside PayPal’s borders, there are no fees for PYUSD transfers on the site. Solana blockchain.
Image source: Getty Images.
So yes, there are good reasons to keep PYUSD coins instead of dollars in your PayPal account. Four percent is a pretty solid annual return, and fee-free transfers could come in handy.
Therefore, I see a clear winner here, even if both coins are forever pegged at the $1.00 price. It can make financial sense to own PayPal USD for fun, while RLUSD coin is best used behind the scenes in RippleNet and XRP transactions. If you don’t even notice its use, RLUSD is doing its job.
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Anders Bylund holds positions in Bitcoin, Ethereum, Solana and XRP. The Motley Fool holds positions and recommends Bitcoin, Ethereum, PayPal, Solana and XRP. The Motley Fool recommends Coinbase Global and recommends the following options: long January 2027 $42.50 calls on PayPal and short December 2025 $75 calls on PayPal. The Motley Fool has a disclosure policy.
Stablecoin Best Buy: PayPal USD vs. Ripple USD was originally published by The Motley Fool
