KEY TAKEAWAYS
- PayPal USD ($PYUSD) holders can now seamlessly transfer tokens between Ethereum and Solana via LayerZero’s Omnichain Fungible Token bridge.
- The integration aims to address the declining circulating volume of $PYUSD on Solana and increase its overall adoption by improving user experience.
- Earlier this year, PayPal made the first commercial transaction in $PYUSD and enabled crypto transfers for businesses.
PayPal-issued stablecoin $PYUSD integrated with blockchain bridge LayerZero for transfers between its native network, Ethereum, and Solana.
LayerZero explained that $PYUSD uses the Omnichain Fungible Token standard, which allows self-custody without reliance on a central entity like PayPal.
Let’s unpack what this integration means for the $PYUSD ecosystem.
$PYUSD Goes Cross-Chain
The leading interoperability protocol, LayerZero, connects 90 networks and is used by projects like Radiant Capital, Merkly, and Cedro Finance.
Now, it will power cross-chain transfers of $PYUSD, allowing users to move funds between Ethereum and Solana quickly and cheaply.
PayPal, in collaboration with Phantom and Paxos, rolled out $PYUSD on Solana in May, but cross-chain transfers were unavailable at that time.
LayerZero notes that $PYUSD transactions will be secured by a hand-picked group of decentralized verifier networks (DVNs), which include Paxos, Google Cloud, and LayerZero Labs.
Will the Integration Boost $PYUSD Adoption?
Currently, the $PYUSD market cap is $513M, with approximately $166M circulating on Solana and $384M on Ethereum.
The volume of $PYUSD on Solana dropped by nearly half a million since August 26, when the token’s market cap exceeded $1B.
When PayPal launched $PYUSD in 2023, the industry celebrated the entrance of a TradFi company into a race dominated by crypto-specific firms like Tether and Circle.
A year later, $PYUSD still lags behind giants like $USDT and $USDC, now ranking #6 among all stablecoins.
But PayPal doesn’t lose heart. Integration with LayerZero could enhance $PYUSD’s accessibility and flexibility, making it more appealing to investors.
PayPal Bridges TradFi and Crypto
In October, PayPal conducted its first business transaction in $PYUSD, demonstrating how digital currencies could streamline complex commercial transactions.
The transfer amount is undisclosed, but we know the recipient was an accounting firm, Ernst & Young, that is auditing PayPal.
Earlier this fall, PayPal enabled US merchants to buy and sell crypto, including $PYUSD, from their PayPal Business account.
Business owners have increasingly expressed a desire for the same cryptocurrency capabilities available to consumers.
– Jose Fernandez da Ponte, Senior Vice President of Blockchain, PayPal
In another attempt to drive $PYUSD adoption, PayPal teamed up with Anchorage Digital, a federally chartered US crypto bank, to offer rewards to Anchorage’s accredited investor clients holding the token.
However, the rewards program raised regulatory concerns. The SEC has a history of labeling stablecoins as securities, including $BUSD issued by Paxos, the same company behind $PYUSD.
What differentiates the $PYUSD rewards program from a traditional bank savings account, and how does it avoid SEC oversight? Luckily (for PayPal and Paxos), the SEC is now busy threatening Immutable and appealing the Ripple case decision.
Can $PYUSD Rival Stablecoin Titans?
Integration with LayerZero aligns with PayPal’s previous efforts to expand $PYUSD accessibility and enhance user experience.
While $PYUSD hasn’t yet dethroned stablecoin giants like $USDT, PayPal is committed to merging TradFi and crypto.
Will this strategy pay off and help $PYUSD become the leading stablecoin? Only time will tell.
References
Click to expand and view references
Add Techreport to Your Google News Feed
Get the latest updates, trends, and insights delivered straight to your fingertips. Subscribe now!
Subscribe now
Lora is a writer based in Ireland. Her background in finance and interest in technology helps her present complex concepts in an intelligible and fun way, which is especially useful when it comes to the world of cryptocurrency and blockchain technology.
Starting as an agency writer, she soon branched out to freelance and later launched a family-run digital marketing agency.
In her spare time, Lora attends dance classes or immerses in reading, preferring technology news or postmodern literature.
View all articles by Lora Pance
The Tech Report editorial policy is centered on providing helpful, accurate content that offers real value to our readers. We only work with experienced writers who have specific knowledge in the topics they cover, including latest developments in technology, online privacy, cryptocurrencies, software, and more. Our editorial policy ensures that each topic is researched and curated by our in-house editors. We maintain rigorous journalistic standards, and every article is 100% written by real authors.
