PayPal has announced the expansion of its US dollar stablecoin, PYUSD, onto the Solana blockchain network to facilitate faster, more secure, and cost-effective stablecoin transactions, according to a statement released on May 29.

Solana confirmed this development separately, highlighting that PYUSD holders would benefit from high throughput, speedy settlement, and a new token extension feature that enhances compliance functionality.

Jose Fernandez da Ponte, PayPal’s Senior Vice President, stated:

"Introducing PYUSD on the Solana blockchain aligns with our objective of offering a stable digital currency tailored for commerce and payments."

Industry experts anticipate this move will bolster PYUSD adoption among retail crypto users. Phantom, the leading Solana-focused crypto wallet provider, announced that its users can now purchase and transfer PYUSD directly from their wallets without transaction fees.

This expansion comes nearly a year after PYUSD was initially launched on the Ethereum blockchain in August 2023. Since then, the stablecoin has shown modest growth and attracted regulatory scrutiny from the US Securities and Exchange Commission (SEC).

According to data from CryptoSlate, PYUSD's market capitalization was approximately $400 million at the time of reporting.

Solana has quietly established itself as a dominant blockchain for stablecoins this year due to its high transaction speeds and minimal costs. PayPal cited these attributes as key factors in its decision to integrate with Solana, noting the platform's popularity for tokenized transactions and its suitability for PYUSD in various payment scenarios among its extensive network of over 30 million merchants.

Analytics from blockchain platforms Artemis and Visa indicate that Solana has been the most utilized blockchain for stablecoin transfers in recent months. The supply of stablecoins on Solana's layer-1 network has surged to exceed $4 billion, with Circle’s USD Coin (USDC) comprising over 70% of these assets.

Market observers attribute this growth to increased capital inflows driven by the meme coin craze and expanding decentralized finance (DeFi) activities within the Solana ecosystem.