Today, PayPal announced that its stablecoin, PayPal USD (PYUSD), is now live on the Solana blockchain. This follows the launch of PYUSD on Ethereum mainnet in August 2023 after nine months. This expansion is designed to increase the usefulness and availability of PYUSD by using Solana’s cheap and high-throughput capabilities.
3/ Why did @PayPal choose to expand the stablecoin to Solana?🪙 Cost-effectiveness⚡ High throughput and speed of settlement💻 Token extensions expand functionality for complianceRead PayPal's open letter on the decision to build on Solana: https://t.co/FKIcmlOKfk pic.twitter.com/8jhwPkHkkO
— Solana (@solana) May 29, 2024
PayPal Targets Awareness, Utility, Ubiquity
During its years in digital payments, PayPal has been able to understand how best it can drive adoption for PYUSD. The company believes that for any new payment technology to be adopted widely there ought to be three stages: awareness, utility and ubiquity.
The first step in introducing people to the new technology is the awareness stage. The PYUSD was released on Ethereum which is the second biggest market cap blockchain. Over 100 million US users were made aware of this stablecoin by integrating it with PayPal and Venmo apps. About 15% of the population, early adopters are targeted during this phase who are important in spreading the word about PYUSD.
The second stage is utility, making technology practical for everyday transactions. Initially eBay helped them find utility through PayPal creating trust between buyers and sellers. For PYUSD it means ensuring cheap fast transactions while being useful for day-to-day transactions. Though Ethereum brought a lot of awareness but still failed to be met all these requirements. Therefore, now PYUSD has been issued on Solana which is known for its cost efficiency and high throughput.
PYUSD to Become Mainstream Payment on Solana
Solana has been selected because of its ability to support features that are essential for PYUSD’s growth. These features include; confidential transfers which keep transaction amounts private among merchants while satisfying regulatory needs, transfer hooks that enable custom programs during token transfers to add functionality as well as memo fields which allow senders and receivers to include additional information with payments.
The final step is ubiquity which means the technology becomes a natural part of human life. What PayPal wants to do is that PYUSD will act as an integral payment method across all conventional applications. This involves faster and cheaper transactions as well as making sure PYUSD can move over a decentralized multi-chain architecture.
