On May 29, PayPal announced that it has extended its US dollar stablecoin, PYUSD, to the Solana blockchain network, aiming to provide users with faster, more secure, and cheaper stablecoin transactions.

Solana confirmed this expansion, highlighting that PYUSD holders would benefit from "high throughput and speed of settlement" along with a new token extension feature that enhances compliance functionality.

Jose Fernandez da Ponte, PayPal’s Senior Vice President, stated that offering PYUSD on Solana supports their objective of creating a stable digital currency for commerce and payments.

Experts believe this move will boost PYUSD adoption among retail crypto users. Phantom, a leading Solana-focused crypto wallet provider, announced that its users can now buy and transfer PYUSD without transaction fees.

This expansion comes nearly a year after PYUSD's initial launch on Ethereum in August 2023. Since then, the stablecoin has seen modest growth and has attracted attention from the US Securities and Exchange Commission (SEC).

According to CryptoSlate, PYUSD's market capitalization was around $400 million at the time of the announcement.

Solana's Growing Role in Stablecoins

Since early this year, Solana has emerged as a prominent stablecoin network due to its high transaction speeds and low costs. PayPal cited these advantages as key reasons for expanding PYUSD to Solana, noting that Solana has become the leading platform for tokenized transactions, ideal for PYUSD's growing payment applications among its over 30 million merchants.

Data from blockchain analytics platforms Artemis and Visa indicates that Solana was the most used blockchain for stablecoin transfers in the past month. The stablecoin supply on Solana has risen to over $4 billion, with Circle’s USD Coin (USDC) comprising more than 70% of these assets.

Market analysts attribute this growth to the influx of capital into Solana, driven by the memecoin craze and the increasing DeFi activity within its ecosystem.