Known as PayPal USD, the stablecoin will let users in the U.S. to make transfers to compatible external wallets, pay other customers and buy foreign currencies using the token

Bitcoin rose on Wednesday to trade above $29,700. Ether also rose along with all other leading crypto currencies. Solana led the winners with a nearly 5 per cent increase. The crypto rally came after PayPal’s launch of a U.S. dollar-pegged stablecoin on Monday. That coincided with a steep decline in global government bond yields Tuesday after the release of China’s weaker-than-expected economic data. In the meantime, U.S. stock futures traded lower as ratings agency Moody’s downgraded a number of mid-size U.S. banks.

Bitcoin increased 2.02 per cent during the past 24 hours to $29,764.75 and rose 0.41 per cent for the week, according to CoinMarketCap data. The token briefly surpassed the $30,000 resistance level on Wednesday.

Ether advanced 1.61 per cent to $1,855.88 but was still 0.82 per cent lower over the last seven days. All other leading crypto currencies traded higher, with Solana’s SOL leading the winners. The token increased 4.93 per cent to $24.19 and logged a weekly gain of 1.07 per cent.

The crypto market received a boost from global payment major PayPal’s stablecoin launch on Monday. Known as PayPal USD (PYUSD), the stablecoin will let users in the U.S. make transfers to compatible external wallets, pay other customers and buy foreign currencies using the token.

PayPal’s stablecoin launch is a vital development for crypto within the U.S. Although the initial launch is restricted, with PayPal’s size and worldwide reach, it is likely to affect global stablecoin usage and adoption going forward, said William Cai, co-founder and managing partner at Wilshire Phoenix.

It is another clear signal of institutional confidence that crypto is not going away and will come out from this ‘crypto winter’ stronger, he said. Stablecoin is the grease of the crypto markets. Overall rise in stablecoin market capitalisation will coincide with a major upward trend in crypto prices.