Originally published on: September 25, 2024
In breaking news on September 25th, PayPal announced that PayPal Business accounts can now buy, sell, and trade cryptocurrencies directly from their accounts. This new functionality is available to all US merchants, except those in New York.
Jose Fernandez da Ponte, PayPal’s senior vice president of blockchain, cryptocurrency, and digital currencies, expressed excitement about this new feature. Merchants using the service can also withdraw their digital assets to external wallets or colder storage options for added security.
Earlier in August of 2023, PayPal introduced the PYUSD stablecoin, which is fully overcollateralized and backed by US dollar deposits. This stablecoin is redeemable at a 1:1 ratio with the US dollar.
In a strategic move, PayPal expanded PYUSD to the Solana network due to its lower transaction costs. This cost-saving measure is expected to encourage the use of PYUSD for smaller transactions such as coffee or lunch purchases. Compared to other blockchains with higher fees and slower finality times, Solana offers transactions as low as $0.0025.
PYUSD on Solana also features “confidential transactions” to obscure payment amounts to the public while remaining visible for compliance purposes.
While PYUSD has reached a $1 billion market capitalization, it still trails behind popular stablecoins like Tether and Circle. As of August 2024, Tether boasts a massive $118 billion market capitalization, with Circle’s dollar-pegged stablecoin following closely behind at $35 billion.
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