Online payment company PayPal is set to integrate its PayPal USD stablecoin (PYUSD) into the Solana (SOL) blockchain, which is increasingly becoming the preferred choice for memecoin issuers.
This move follows the successful launch of PYUSD on the Ethereum (ETH) blockchain and its subsequent addition to PayPal’s Venmo peer-to-peer (P2P) payments service. According to Bloomberg, the decision to join Solana was driven by the blockchain’s speed and low transaction fees.
Expanding PYUSD’s Reach In The Memecoin Market
Solana’s transaction processing capabilities, currently measuring 1,423 transactions per second (tps) according to SolanaFM, attracted PayPal to the blockchain. In comparison, Ethereum processes around 12 to 15 tps.
Jose Fernandez da Ponte, Senior Vice President of PayPal’s blockchain, cryptocurrency, and digital currency group, emphasized the need for sustained high transaction volumes in retail, positioning Solana as “an ideal candidate.”
Solana has witnessed a surge in trading volume, reaching its highest levels over two years. Memecoins such as Slerf, Boom of Meme, Snap, and Dogwifhat have driven decentralized exchange activity on the blockchain, aligning with the payment company’s move to explore new opportunities in the emerging memecoin market.
According to Bloomberg, while most PYUSD activity is taking place on crypto exchanges and within decentralized finance, PayPal is looking to expand its use to retail payments and emerging markets in Latin America, Southeast Asia, and Africa.
In April, PayPal enabled Xoom, its cross-border money transfer service, to facilitate international transfers using dollars converted from PYUSD.
Multi-Blockchain Strategy For PayPal’s PYUSD Integration
It is worth noting that PayPal encountered regulatory scrutiny and temporarily halted its stablecoin efforts in February 2023. The company also received a subpoena from the US Securities and Exchange Commission’s division of enforcement in November related to its stablecoin work.
However, Fernandez da Ponte confirmed that PayPal is cooperating with the SEC, providing the requested information to address any concerns.
Despite technical setbacks, including reported network slowdowns and outages, PayPal expresses confidence in Solana’s stability. PayPal believes that users can easily switch to Ethereum in the event of any disruptions.
In addition, the online payment company intends to explore additional blockchains for PYUSD integration, which aligns with its original plan for the stablecoin to operate across multiple chains.
The firm’s entry into the stablecoin space reflects the growing interest of traditional payment companies in digital assets. Stripe Inc.’s recent decision to enable online stablecoin payments for its merchants further reinforces this trend.
At press time, SOL was trading at $168, up over 1% in the last 24 hours and 24% in the last month alone.
Featured image from Shutterstock, chart from TradingView.com