PayPal has officially confirmed its preference for the Solana blockchain over Ethereum for launching its stablecoin, PYUSD. José Fernández da Ponte, head of PayPal’s Blockchain, Crypto, and Digital Currencies business unit, cited the Ethereum network's shortcomings in facilitating effective payment solutions as a key reason for this decision.
During a recent announcement, Fernández stated that while Ethereum has been a pioneer in the blockchain space, it is not the optimal choice for payment solutions. Solana, on the other hand, offers significant advantages, including the ability to handle token extensions and an impressive transaction speed of up to 1,000 transactions per second at a fraction of Ethereum's costs. This makes Solana particularly well-suited for high-volume transactions that PayPal aims to support.
On May 29, PayPal revealed the launch of its stablecoin, PYUSD, on the Solana blockchain. The company emphasized that this move was motivated by Solana's capacity to process “massive amounts of transactions at high speeds with extremely low costs.” Sheraz Shere, GM of Payments at the Solana Foundation, echoed this sentiment, highlighting Solana’s scalability as the ideal blockchain for payment solutions.
Following the stablecoin's launch, PayPal announced the first Global PYUSD Portal Hackathon on June 30. This collaborative project with Portal aims to encourage innovation on the Solana network, with a total prize pool of 40,000 PYUSD (equivalent to $40,000) distributed among six winners. The grand champion will receive 15,000 PYUSD, which is about $15,000. The winners will be showcased at the Solana Hacker House in Hong Kong from October 24 to 26, 2024.
In a significant development, the TrueX exchange, founded by former Coinbase employees Vishal Gupta and Patrick McCreary, has opted to use PYUSD instead of the more widely adopted USDC. Gupta was part of the team that developed USDC during his time at Coinbase. The decision to choose PYUSD illustrates growing confidence in the stablecoin’s viability.
Data from DeFiLlama reveals that the supply of PYUSD on the Solana blockchain has surpassed that on Ethereum. Solana now holds 50.2% of the total PYUSD supply, amounting to approximately $367.54 million, while Ethereum holds 49.8%, roughly $364.66 million. This shift indicates increasing adoption and usage of PYUSD within the Solana ecosystem.
PayPal's PYUSD is a collateralized stablecoin backed by reserves that include US dollar deposits, cash equivalents, and U.S. Treasury bonds. The stablecoin maintains a 1:1 peg to the U.S. dollar and is available for transactions on both PayPal and Venmo platforms, providing users with a reliable digital currency for everyday transactions.
PayPal's decision to launch PYUSD on the Solana blockchain marks a significant milestone in the evolving landscape of digital currencies. By opting for Solana, PayPal aims to leverage its speed, scalability, and cost-effectiveness to facilitate a robust payment solution. As PYUSD gains traction and further integrations occur, it could reshape the dynamics of stablecoins and blockchain payments in the digital economy.
September 2024, Cryptoniteuae