On May 29, PayPal announced the deployment of its PYUSD stablecoin on the Solana blockchain, expanding beyond its previous availability on Ethereum. This strategic move introduces “confidential transfers,” a significant feature aimed at enhancing transaction privacy for merchants and consumers while ensuring regulatory transparency.
The confidential transfers feature allows merchants to keep transaction amounts private for consumers while maintaining visibility for regulatory purposes, as detailed in a blog post by Solana on the same day. This addition to PYUSD marks a notable advancement in the stablecoin’s functionality.
The news sparked reactions from the cryptocurrency community, with Bitcoiner Udi Wertheimer commenting on social media platform X, “This sounds a lot like ‘confidential transactions,’ a feature Bitcoin devs have been larping about for almost a decade but never built, and you’re telling me PayPal users will have it first? LOL.”
Mert Mumtaz, CEO of Helius Labs, highlighted the broader implications of PayPal’s move to Solana, stating, “PayPal didn’t expand to Solana purely for speed. Solana also allows confidential transfers and token programmability natively on the L1 itself. Confidential transfers alone are a game-changer.” He also emphasized the additional programmability of Solana, including “transfer hooks” that enable more control over assets for wallets by calling specific programs with each token transfer.
The Solana Foundation noted that Solana’s token extension standard provides several benefits for the PYUSD stablecoin, including reduced development and testing time, enterprise-ready “plug-and-play” capabilities, and flexibility. These token extensions allow PYUSD to be integrated and used both within and outside the PayPal ecosystem with any compatible wallet, exchange, or library.
Launched in August 2023 and primarily backed by U.S. Treasury Reverse Repurchase Agreements, PYUSD has seen a significant increase in its circulating supply, which has grown by 50% since the beginning of this year. According to CoinGecko, PYUSD has a 24-hour trading volume of around $18 million.
The deployment of PYUSD on Solana represents a pivotal development in PayPal’s digital currency strategy, leveraging Solana’s advanced blockchain features to enhance the stablecoin’s utility and privacy.
