June 21, 2024

PayPal has deployed its PYUSD stablecoin on the Solana blockchain, enhancing its functionality. The Solana integration extends PYUSD’s features, allowing it to offer confidential transfers.

The stablecoin was previously only available on Ethereum (ETH). The latest move signifies PayPal’s strategic push to leverage Solana’s advanced blockchain capabilities.

PayPal Introduces Confidential Transfers to Solana-Based Stablecoin

Announced on May 29, PYUSD’s confidential transfers will allow merchants to keep their customers’ transaction amounts private without compromising transparency for regulatory purposes. This marks a significant step in providing privacy and compliance in digital transactions.

This capability has been one of the most talked about subjects in the digital asset community for years, but PayPal has now actualized it. Udi Wertheimer, a well-known Bitcoin advocate, expressed his surprise on the social media platform X. 

Wertheimer noted that the Bitcoin community has long debated confidential transactions without implementation. It’s only surprising to see PayPal fulfill it first before others.

Meanwhile, Mert Mumtaz, CEO of Helius Labs, pointed out that PayPal’s expansion to Solana was driven not only by the blockchain’s speed but also by its inherent support for token programmability and confidential transfers.

Essentially, Solana’s infrastructure allows for transfer hooks, triggering specific programs with each token transfer. This provides greater control and customization for asset management within wallets. 

Notably, the Solana blockchain’s token extension standard adheres to the SPL token standard. This framework benefits PYUSD in many ways, including enterprise-ready plug-and-play abilities, reduced development and testing time, and increased flexibility.

The Solana Foundation highlighted that these extensions allow the seamless integration of PYUSD and permit its usage across various platforms outside of PayPal’s ecosystem, including any exchange, compatible wallet, or library.

PYUSD for Cross-Border Transfers

This deployment on the Solana blockchain adds to PayPal’s previous developments. A notable example is the introduction of international money transfers using the PYUSD stablecoin, as announced on April 4.

PayPal stated that it would allow users across the US, except those in Hawaii, to fund international transfers using the stablecoin. This new feature, launched on April 4, uses the company’s Xoom service to facilitate these transactions.

US users can now convert their dollars into PYUSD and use it to send money to family and friends in over 160 countries. This method ensures that the funds are transferred quickly and reliably.

When using PYUSD for these transfers, users will not incur any transaction fees from Xoom, making it a cost-effective option. PYUSD was launched in August last year and is issued by Paxos Trust Company. According to Paxos, PYUSD is backed by US Treasury Reverse Repurchase Agreements.

Meanwhile, Solana’s network explorer reveals the total circulation of $400 million for the stablecoin, with $5 million already circulating on the blockchain.

In the meantime, data from CoinGecko reveals that the circulating supply of PYUSD has increased by 50% since the beginning of 2024. Its 24-hour trading volume stands at approximately $18 million.

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