PayPal Adds “Confidential Transfers” To Its PYUSD Stablecoin On Solana

PayPal has launched its PYUSD $1.00 stablecoin on the Solana blockchain, expanding from just being available on Ethereum. According to a recent Solana blog post, a major new feature for PYUSD on Solana is “confidential transfers,” enabling merchants to keep transaction amounts private from customers while still providing the required visibility for regulatory purposes.

This “confidential transfers” capability drew mockery from Udi Wertheimer, a Bitcoin proponent. In a post on the social media platform X (formerly Twitter), Wertheimer poked fun at Bitcoin developers discussing “confidential transactions” for nearly a decade without actually building them. He expressed surprise that PayPal users would get this privacy feature first, saying, “LOL.”

Source: Udi Wertheimer

However, Mert Mumtaz, CEO of Helius Labs, stated that PayPal’s expansion to Solana was driven by more than just the blockchain’s speed advantages. Mumtaz highlighted that Solana natively allows confidential transfers and token programmability on its base layer (Layer 1), calling this “a game-changer.”

The token programmability Mumtaz referred to includes “transfer hooks,” which enable calling specific programs with each token transfer. This gives wallets greater control and customization abilities over their assets.

PayPal: Solana’s SPL Standard Boosts PYUSD Integration

According to PayPal, Solana’s token extension standard, adhering to the SPL token standard, offers several key benefits for PYUSD. These include reduced development and testing efforts, enterprise-ready “plug-and-play” integration capabilities, and flexibility to adapt to various use cases.

The Solana Foundation explained that these token extensions are an open standard, allowing PYUSD integration within PayPal’s ecosystem and any compatible wallet, exchange, or library that supports the standard.

Furthermore, Paxos issued PYUSD in August 2023, primarily backing it with U.S. dollars. Treasury reverse repurchase agreements. According to CoinGecko data, its circulating supply has grown by around 50% since the beginning of 2024, and the stablecoin currently has a 24-hour trading volume of approximately $18 million.

While PYUSD’s total circulation stands at around $400 million, the current supply issued on the Solana network is $5 million, according to Solana’s network explorer data.

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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.

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