Confidential transfers enable merchants to keep transaction amounts private for consumers while ensuring that regulatory authorities can still monitor them. This feature ensures privacy for users while complying with financial regulations.
PayPal has launched its PYUSD stablecoin on the Solana blockchain, adding a new feature called “confidential transfers.” This allows PayPal to offer transaction amount confidentiality to users while ensuring regulatory compliance. The deployment on Solana was announced on May 29, expanding PYUSD beyond its initial availability on Ethereum.
PayPal Introduces “Confidential Transfers” on Solana
One notable extension for PayPal’s PYUSD stablecoin on Solana is the introduction of “confidential transfers.” This feature enables merchants to offer transaction amount confidentiality to their customers while ensuring regulatory visibility, as detailed in a Solana blog post on May 29.
Bitcoiner Udi Wertheimer expressed skepticism about this development, likening it to Bitcoin’s long-discussed but never-implemented “confidential transactions.”
Helius Labs CEO Mert Mumtaz highlighted that PayPal’s expansion to Solana was not just for speed but also for the platform’s native support for confidential transfers and token programmability on Layer 1 (L1). He noted that confidential transfers alone represent a significant advancement in financial technology.
Solana’s additional programmability features, such as “transfer hooks,” allow specific programs to be called with each token transfer, providing enhanced control over assets for wallets.
PayPal’s PYUSD Stablecoin on Solana: Benefits and Circulation Insights
Solana’s token extension standard, which adheres to the SPL token standard, offers significant advantages for PayPal’s PYUSD stablecoin, according to the firm. These benefits include streamlined development and testing processes, enterprise-ready “plug-and-play” capabilities, and enhanced flexibility.
The Solana Foundation elaborated that these token extensions (TEs) are an open standard, enabling PYUSD to integrate seamlessly not only within the PayPal ecosystem but also with any compatible wallet, exchange, or library outside of PayPal.
PYUSD was initially launched in August 2023 and is primarily backed by U.S. Treasury Reverse Repurchase Agreements, managed by issuer Paxos. Since the beginning of the year, its circulating supply has increased by 50%, with a current 24-hour trading volume of approximately $18 million, as reported by CoinGecko.
Previously available exclusively on Ethereum, the stablecoin’s total circulation stands around $400 million. On Solana, the current supply of PYUSD is noted at $5 million, based on data from Solana’s network explorer.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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