PayPal PYUSD Expands to Solana: Stablecoin Bullrun in the Making?

Key Takeaways

• PayPal expands PYUSD to Solana blockchain in its first venture beyond Ethereum.
• This move by PayPal could revitalize the stablecoin market, encouraging competition and innovation.
• The stablecoins market cap is at a two-year high, having grown eight months consecutively.

PayPal Holdings announced  that PayPal USD (PYUSD) is now available on the Solana blockchain, making PayPal’s stablecoin faster and more cost-effective to use.

This move marks PayPal USD’s first expansion beyond the Ethereum ecosystem. This prompted market speculation about a potential boost in sentiment for the broader stablecoin market, which is experiencing a notable increase in capitalization.

PayPal’s PYUSD Now Available On Solana

The availability of PYUSD on Solana offers users a broader range of blockchain options, “enhancing flexibility and control over their transactions,” the payment company said.

Solana’s reputation for processing large volumes of transactions at high speeds and with minimal costs makes it particularly advantageous for commercial applications. As the most utilized blockchain for stablecoin transfers, according to data from the blockchain analytics platform Artemis , Solana has become the preferred choice for tokenized transactions, making it an ideal fit for PYUSD, especially in payment use cases.

Jose Fernandez da Ponte, Senior Vice President of PayPal’s Blockchain, Cryptocurrency, and Digital Currency Group, stated, “Making PYUSD available on the Solana blockchain aligns with our objective of facilitating a digital currency with a stable value optimized for commerce and payments.”

PYUSD, PayPal‘s stablecoin, had a market capitalization  of $398.5 million as of May 30, 2024, making it the 171st largest cryptocurrency by market capitalization. The circulating supply, representing the total available supply, stands at 399.1 million PYUSD.

Boosting Sentiment Over Stablecoins

The recent PayPal-Solana partnership injects renewed energy into the stablecoin market , potentially prompting other issuers to step up their game. With a wave of new entrants adopting a payments-first approach, industry giants like USDT, USDC, and DAI face increased competition.

Among newcomers, Agora Dollar , set to launch in June, shares the revenue generated with businesses that adopt its AUSD stablecoin, as founder Nick van Eck outlined in a recent post . Van Eck anticipates significant growth in the stablecoin market, projecting it to surge from its current $150 billion valuation to a staggering $3 trillion by 2030.

“At Agora Dollar, we believe that digital dollars will take over the world, starting with the Eurodollar market. Our own AUSD’s model will be the dominant form in the world by 2030,” he posted  on X.

In addition to industry enthusiasm, the International Monetary Fund (IMF) has also bolstered sentiment around stablecoin adoption. In a 58-page report , the IMF asserts that digital money, including both private stablecoins and central bank digital currencies (CBDCs), could play a pivotal role in enhancing financial inclusion and quality of financial services in remote and dispersed nations, particularly in the Pacific Ocean region.

Stablecoins Market Cap New Records

A recent report  by CCData indicates that the stablecoin market capitalization has surged to its highest level since April 2022, marking eight consecutive months of growth. According to the cryptocurrency analytics platform’s findings on May 29, the stablecoin market cap increased by 0.63% since the beginning of the month, reaching $161 billion.

However, CCData notes that “stablecoin market dominance currently stands at 6.07%, down from 7.01% in April.” This decline is attributed to the recovery in prices of major crypto assets, signaling improved market sentiment following the approval of a spot Ethereum ETF in the US.

Tether (USDT), that is the largest stablecoin by market capitalization, achieved an all-time high market cap of $111 billion as of May 29. This figure elevated its stablecoin market cap dominance to 69.3%.

CCData also highlighted a consistent increase in Circle’s USDC (USDC) market capitalization for the sixth consecutive month, reaching $32.6 billion in May. The report also showed that other relevant increases have been recorded by BlackRock’s tokenized fund token BUIDL, Athena USDe, and Franklin Templeton’s BENJI.

About the Author

Giuseppe Ciccomascolo

Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors. Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.

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