PayPal Ventures into the Solana Blockchain!
As cryptocurrencies continue to gain influence in the fintech industry, global payment giant PayPal has officially joined the crypto revolution. Recently, PayPal announced that its stablecoin, PayPal USD (PYUSD), has been launched on the Solana blockchain, enhancing the usability of PYUSD in various financial applications through Solana’s high-speed and low-cost transaction capabilities.
Since its launch in August 2023, PYUSD has not performed remarkably in the market, despite having the “brand halo” of PayPal. After about a year online, it only has around 8,600 holders and a market value of less than $400 million, making its influence negligible compared to other USD stablecoins.
After being launched on Ethereum for nearly a year, PayPal has once again announced its entry into the Solana blockchain, bringing new stimulation to PYUSD.
“Ethereum works well,” said Jose Fernandez da Ponte, PayPal’s Senior Vice President of Blockchain, “but if you’re interested in retail payments like we are, you basically need at least 1,000 transactions per second, and transaction costs must be just a few cents, not dollars.”
In other words, Ethereum’s transaction speed and fees do not meet the requirements for high-volume payments.
What advantages does Solana have?
One major feature of the Solana blockchain is its transaction speed and lower costs, which also became key factors in attracting PayPal. According to Solana’s data, it can currently process 1,841 transactions per second (TPS), although still far from Visa’s 65,000 TPS, it significantly surpasses Ethereum’s 12-15 TPS.
Overall, Solana is faster than Ethereum in terms of transaction speed and has lower transaction fees, both of which are crucial for retail transactions.
“Solana’s speed and low transaction costs were the key factors in our decision,” said Jose Fernandez da Ponte.
Although Solana has experienced technical issues in the past, such as system downtime, the team has made significant improvements, ensuring the stability of the platform for PYUSD’s smooth operation and providing a better trading experience for PayPal users.
At the time of writing, PYUSD has a market value of $398 million, which is almost insignificant compared to the $111 billion market value of the stablecoin USDT. However, with PYUSD officially operating on Solana, its market influence is expected to increase. Furthermore, PayPal plans to expand PYUSD to emerging markets such as Latin America, Southeast Asia, and Africa, where high growth potential may further drive the adoption and circulation of PYUSD.
This move by PayPal not only sets it apart from traditional financial companies but also indicates that stablecoins could become a crucial bridge connecting the traditional financial and digital asset worlds. As fintech companies gradually recognize the compatibility between stablecoins and the market, the role and value of PYUSD will become even more prominent.
The future development of PYUSD will determine the success of PayPal’s digital strategy. However, regardless of the outcome, this partnership will take a big step towards providing better and more affordable financial services for users worldwide.
Reference:
coindesk
,
beincrypto