2min read
Published on: May 31, 2024
#Crypto 360
#Daily Brew
Payment solutions provider PayPal’s ambitious stablecoin PYUSD will now be available on the Solana (SOL) blockchain.
PayPal said that it specifically chose Solana because the blockchain offers fast settlement times, high throughput and low fees.
With a block time of 400 milliseconds, transactions settle within seconds. It allows merchants and consumers near-immediate access to funds.
The other reasons why PayPal chose the Solana blockchain for its PYUSD stablecoin are:
Token Extensions: Solana offers token extensions which are essentially compliance in a box. Unlike other blockchains, which require institutions to use third party tools for added features, Solana’s token extensions are readily available to any stablecoin developer, natively in the protocol.
Confidential Transfers: Solana lets merchants maintain confidentiality of stablecoin transaction amounts while maintaining visibility of other transaction details for regulatory purposes.
Transfer Hooks: Solana enables developers to invoke custom programs during token transfers for individuals and merchants using PYUSD.
Among the stablecoins, only Tether (USDT) and Circle’s USD Coin (USDC) rank among the top 10 cryptocurrencies in terms of market capitalisation.
However, both Tether and Circle are crypto-focused crypto firms. PayPal, on the other hand, is a global fintech company offering online payment solutions in many countries.
Did you know? The launch of the PYUSD stablecoin marked the first time that a large fintech brand introduced its own cryptocurrency in the digital economy.
PayPal launched the PYUSD stablecoin on the Ethereum (ETH) blockchain in August 2023.
The growth of PYUSD’s market cap over the last few months has been steady.
Towards the end of the last year, its market cap stood around $159 million. However, the approval of Bitcoin (BTC) exchange-traded funds (ETFs) in the United States in January 2024 led to PYUSD’s market cap surging nearly 2x to more than $300 million.
Related: Bitcoin Exchange-Traded Funds
In March, the stablecoin’s market cap retreated to as low as $188 million. However, April brought a substantial recovery.
The news of ether ETFs getting approved in the U.S. market has led to PYUSD’s market cap surging to as high as $398 million of late.
Though it’s a steady progress, PYUSD is still nowhere as close as USDT or USDC. The expectation was certainly higher.
We will see if the addition of PayPal’s stablecoin to Solana can change the dynamics of the broader stablecoin market.
This article is for informational purposes only and not intended as investment or financial advice. It contains opinions and speculations that are subject to change without notice.
The author and publisher disclaim any liability for decisions made based on the content of this article. Readers are advised to conduct their own research and consult a financial advisor before making investment decisions.
Join the community to receive exclusive market analysis and updates!
Ignite your financial journey with BitDelta's diverse asset classes.