Key Points:
PayPal stablecoin PYUSD expands to Solana for lower-cost transactions and daily use.
PYUSD leverages Solana’s features for instant, low-fee transactions and regulatory compliance.
PayPal announced that its stablecoin, PayPal USD, or PYUSD, has integrated with the Solana blockchain in an expansion far beyond its original Ethereum platform.
PayPal Stablecoin PYUSD Expanded to Solana Blockchain
The move, announced on May 28, seeks to reduce transaction fees and boost the use of PayPal stablecoin PYUSD for small and daily purchases. It is expected to breathe life into PYUSD, which has struggled to take off despite robust support from PayPal. Currently, it has some 8,600 holders on Ethereum and a market cap of just under $400 million, modest next to stablecoins from Circle and Tether.
PYUSD's transactions will benefit from instant settlement times and minimal fees from leveraging Solana's blockchain, no matter how small the transactions are. That is, the Solana network, a network of high-speed and low-cost transactions, supports the expansion of PYUSD, perhaps reaching over 30 million merchants worldwide.
Strategic Move to Boost PYUSD's Competitiveness in the Stablecoin Market
A vital element of this integration is Solana's Token Extensions (TEs), which introduce richly customizable features for token operations. PayPal stablecoin PYUSD implements several of them, including a transfer hook for interacting with Solana programs during the transaction and a permanent delegate for regulatory compliance. PYUSD on Solana Whitepaper describes these features.
PayPal's rollout of PYUSD on Solana not only brings diversification to its blockchain ecosystem but also enhances its competitive advantage against the dominant stablecoins from Tether in the form of USDT and Circle in the form of USDC. Initially available only on Ethereum as an ERC-20 token, the stablecoin was launched in August 2023 with Paxos Trust Company, backed by U.S. dollar deposits, short-term Treasurys, and cash equivalents.
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