Has PayPal’s Solana Expansion Helped Its Stablecoin’s Price?
The world of crypto is rarely predictable. Cryptocurrencies see peaks and valleys, with some having charged up and down in the last decade like they’re being traded on rollercoasters. But stablecoins are designed to maintain more stability than cryptos such as Bitcoin.
If you’re wondering about the latest Solana price (it can easily be checked on Binance, Yahoo Finance and Forbes) after PayPal’s stablecoin expansion, you’re not the only one. In theory, PayPal’s PYUSD should have been given a boost recently.
In May 2024, PayPal issued a press release with the headline “PayPal USD Stablecoin Now Available on Solana Blockchain, Providing Faster, Cheaper Transactions for Consumers”. So has the Solana expansion prompted a rise in the PayPal stablecoin price?
A slow start on Ethereum, and a quick start on Solana
Last year, PayPal’s stablecoin got off to a slow start on the Ethereum blockchain. But it’s now benefitted from its expansion on Solana. PYUSD passed $1 billion in market capitalization in August, more than doubling its supply since June.
PayPal said in that May press release, “The Solana blockchain is known for processing massive amounts of transactions at high speeds with extremely low costs, providing significant benefits for commerce use cases.”
And their optimism has been proved wise. The Solana expansion has prompted the watershed moment that observers had predicted last year. Since June, PYSUD has grown by 171% (as of 26 August), and it’s approaching the Tether USDT stablecoin growth.
Yahoo Finance recently quoted Tom Wan, business development and strategy associate at digital asset investment product firm 21.co Integrations, who said, “Incentives play a huge role” in PYUSD’s growth.
Yahoo said of these incentives: “Solana-based protocols Kamino, Drift and Marginfi all introduced boosted rewards for PYUSD deposits, offering double-digit annualized yields for token holders.”
What are the other biggest stablecoins?
Forbes describes stablecoins as “a type of cryptocurrency designed to maintain a stable price over time, pegged to the value of an underlying asset, like the U.S. dollar.” Stablecoins “aim to offer all the benefits of crypto while attempting to avoid rampant volatility.”
The aforementioned Tether USDT is the biggest stablecoin, ranked by market capitalization measuring each crypto’s circulating supply (analogous to the free-float capitalization on the stock market). The Tether coin’s market cap is at over $118 billion, dwarfing PayPal’s figure.
Next is USDC, then Edelcoin (EDLC) and Dai (DAI). PayPal USD is then behind First Digital USD (FDUSD) and Ethena USDe (USDe), and its traded volume is comparable to these two coins.
At the time of writing, Tether is way up at $74,061,593,083 volume traded in the last 24 hours, while PayPal’s stablecoin is at $36,589,613.
Is PYUSD’s growth sustainable?
Forecasting the kind of boosts and falls that Bitcoin and others have seen may not be appropriate. PYUSD, as a stablecoin, can’t be neatly compared to cryptocurrencies such as BTC, which are decentralized. PayPal’s stablecoin is integrated into their payment systems. In May of this year, Yahoo Finance reported on Triple-A’s incorporation of PYUSD into its payment services.
PYUSD is issued by Paxos Trust Company, a US-regulated crypto custodian company. PayPal themselves describe Paxos as “a fully chartered limited purpose trust company” and say that Paxos is “subject to regulatory oversight by the New York State Department of Financial Services.”
PayPal emphasise their license to “engage in virtual currency business activity by the New York State Department of Financial Services”. (Note that if you’re in Hawaii, “Buying, selling, transferring, and holding cryptocurrency with PayPal” is not possible.)
Paxos’s head of asset growth, Nick Robnett, said, “Paxos is excited to see Triple-A enable businesses to leverage the benefits of digital currencies and stablecoins without the complexities of holding them. This is crucial for companies that still prefer the familiarity of operating with traditional currencies.”
David Shuttleworth, a partner at research firm Anagram, recently said that while his “sense is that these incentives are not sustainable”, “they are not designed to be permanent”. He explained, “Part of the idea here is to get more PYUSD into circulation and get users, especially new ones, on-chain and active on the Solana ecosystem.”
So PYUSD’s growth is unlikely to continue in quite the same upward trajectory, but PayPal wouldn’t have expected that anyway. Sites like Yahoo Finance and Binance will be watching closely. As a trusted payment processing company, PayPal won’t want the same unpredictability that has often characterized cryptocurrencies.
Has anyone predicted a PayPal USD price for 2025?
PayPal USD’s current price stands at a hair under $1 at the time of writing. Some observers have predicted that PYUSD’s price will soon climb to just over $1, but by October drop to just under $0.90. By January 2025, PYUSD may stand at just over $1 again. You can see that PYUSD has been a lot more stable than a crypto like Bitcoin by looking at its all-time pricing on *Yahoo Finance (choose the “All” chart).
Tether USDT has remained similarly stable, with its price peaking in 2019 at $1.0137. Today’s range is $1 to $1.0009.
Most observers seem to agree that PYUSD will be predictable. It’s early days, but PayPal’s Solana expansion has helped their price, and the coming months look promising.
*Yahoo Finance source – https://finance.yahoo.com/quote/PYUSD-USD/