Reports indicate that PayPal’s stablecoin, PYUSD, was initially set to be introduced in collaboration with FTX on the Solana blockchain in 2022.
However, unforeseen circumstances led to the sudden cancellation of these plans. The collaboration between PayPal and FTX for the initial release of PYUSD on Solana was unexpectedly put on hold.
According to Colin Wu, the delay was primarily due to FTX’s unfortunate crash, which caused uncertainty and prompted both parties to reevaluate their strategies.
Solana Failed to Secure a Partnership with PayPal
Due to the categorization of the main tokens on the public chain as securities by the US Securities and Exchange Commission (SEC), regulatory challenges arose, making it difficult to expand PYUSD to other Layer 1 (L1) blockchains.
As a result, PayPal has now decided to issue its stablecoin through Paxos Trust Company, which represents a significant change from its original collaboration plans.
PayPal, known as a leading online payment platform, had carefully prepared for the introduction of its stablecoin PYUSD with the support of cryptocurrency exchange FTX. The goal of the collaboration was to leverage the speed and scalability of the Solana blockchain, known for its throughput and low transaction fees.
The aim of this partnership was to explore new opportunities for PayPal in the rapidly growing field of digital assets. Unfortunately, the collaboration between PayPal and FTX was abruptly halted when FTX experienced a significant crash.
This unforeseen event forced both parties to halt their work on the PYUSD issuance on the Solana blockchain. The crash created an atmosphere of uncertainty and caution, compelling PayPal and FTX to reconsider their plans and explore alternative approaches. In the future, the PYUSD stablecoin by PayPal will now be issued by Paxos Trust Company.
This digital asset will initially be available to eligible US customers, enabling seamless transfers within the PayPal platform and compatible external wallets. Additionally, users can utilize PYUSD for purchases and exchange it for other well-known cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and more.
The unexpected delay in PayPal’s collaboration with FTX on the Solana blockchain highlights the challenges and uncertainties that can arise in the evolving crypto landscape.
Overall, FTX’s crash and regulatory barriers prompted PayPal to reevaluate its strategy, resulting in a shift of its issuance partnership to Paxos Trust Company.
As the PYUSD stablecoin by PayPal enters the market under this revised approach, it remains to be seen how this strategic shift will impact the acceptance and growth trajectory of the stablecoin.
Featured image from Unsplash, chart from TradingView.com.