PayPal Ventures into the Solana Blockchain!
As cryptocurrencies continue to gain influence in the fintech sector, global payment giant PayPal has officially joined the crypto revolution. Recently, PayPal announced that its stablecoin, PayPal USD (PYUSD), has been officially launched on the Solana blockchain, enhancing the usability of PYUSD in various financial applications through Solana’s high-speed, low-cost transaction capabilities.
Since its launch in August 2023, PYUSD has not performed impressively in the market, despite having the “brand halo” of PayPal. With only about 8,600 holders and a market value of less than $400 million after being online for about a year, its influence is negligible compared to other USD stablecoins.
After being launched on Ethereum for almost 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, the Senior Vice President of Blockchain at PayPal, “but if you are interested in retail payments like we are, you need at least 1,000 transactions per second, and the transaction cost must be only a few cents, not dollars.”
In other words, the transaction speed and fees of Ethereum do not meet the requirements for large-scale payments.
What advantages does Solana have?
One major characteristic of the Solana blockchain is its transaction speed and lower fees, which is a key factor that attracted PayPal. According to Solana’s data, it can currently process 1,841 transactions per second (TPS), surpassing Ethereum’s 12-15 TPS, although still far from the 65,000 TPS of traditional payment system Visa.
Overall, Solana is faster than Ethereum and has lower transaction fees, which are crucial for retail transactions.
“The speed and low transaction fees of Solana 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 stability of the platform has greatly improved after improvements, ensuring the stable operation of PYUSD and providing a better trading experience for PayPal’s users.
At the time of writing this article, PYUSD has a market value of $398 million, which is almost negligible compared to the $111 billion market value of stablecoin USDT. However, with PYUSD officially operating on Solana, its market influence is expected to increase. In addition, PayPal plans to expand PYUSD to emerging markets such as Latin America, Southeast Asia, and Africa, which have high growth potential. This expansion may further drive the adoption and circulation of PYUSD.
PayPal’s move not only sets it apart from traditional financial companies but also indicates that stablecoins may become the key bridge connecting the traditional financial and digital asset worlds. As fintech companies gradually recognize the compatibility of stablecoins with the market, the role and value of PYUSD will become more prominent.
The future development of PYUSD will determine the success of PayPal’s digital strategy. However, regardless of the outcome, this collaboration will take a significant step towards providing better and more affordable financial services for users worldwide.
References: coindesk, beincrypto
