LayerZero Enables Seamless $PYUSD Transfers Between Ethereum and Solana

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.

ReferencesClick to expand and view references

• PayPal USD (PYUSD) Integrates LayerZero to Connect Across Chains, Enabling Seamless Transfers Between Ethereum and Solana (LayerZero)
• PayPal USD Stablecoin Now Available on Solana Blockchain, Providing Faster, Cheaper Transactions for Consumers (PayPal)
• PayPal Completes Its First Business Transaction Using Stablecoin (Bloomberg)
• PayPal Enables Business Accounts to Buy, Hold and Sell Cryptocurrency (PayPal)

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