Today, PayPal announced that the PayPal USD (PYUSD) stablecoin is going live on the Solana blockchain. This comes nine months after the initial launch of PYUSD on the Ethereum mainnet in August 2023.

PayPal has over two decades of payments experience. In our earliest years, we shouldered the responsibility of not just facilitating payments, but also introducing and evangelizing a new technology — digital payments. This experience provides novel insights that allow us to refine our approach to the adoption of PYUSD; specifically, what we believe are the three phases that lead to mass adoption of any novel payments mechanism:

1. Awareness

2. Utility

3. Ubiquity

Awareness through Introduction

As we discussed in our inaugural post “Pay How You Want," we believe crypto provides an opportunity to innovate certain high-opportunity segments of today's payment rails. But such transformations don’t occur overnight. Payments are omnipresent and deeply entrenched by both habit and practice, so changes are gradual and steady. Introducing a new payment method is as much a behavioral transformation as it is a technological or financial one.

The first step in adoption is awareness — i.e. the task of simply introducing people to the fact that a new technology exists. In this phase, “early adopters” are the target audience — a group that makes up about 15% of the population.

Launching PYUSD specifically on Ethereum in late 2023 ensured this awareness phase among early adopters. By launching on the #2 blockchain in market cap and the largest, most active ecosystem among smart contract platforms, we let the world know, "PYUSD is here.” Moreover, PYUSD’s integration in the PayPal and Venmo apps introduced it to over 100 million US users. Further, exchanges, our institutional partners, and our on/off ramp partners helped expand PYUSD's reach outside the PayPal ecosystem.

We know from experience that getting a new payment mechanism into the hands and minds of people is a necessary first step — with an eye towards growing utility for long-term adoption.

Utility through Integration

The next step in the adoption of a new payments technology is utility. By utility, we mean the steady introduction of methods, use cases, and features that transform initial awareness into practical use. In the early days of PayPal, we found this utility through eBay — where PayPal could provide a trusted transaction between two parties who did not know each other. This trust was supported by various protections and a promise to never share a consumer’s full financial information.

Over the last two decades, we’ve consistently been reminded that payment options must be seamless, efficient, and beneficial. Critically, this means payments must be fast and inexpensive. The Ethereum mainnet has afforded immense awareness to PYUSD but has not solely fulfilled all the criteria needed to achieve PYUSD’s mission of being the stablecoin of commerce. To do this, PYUSD must also be issued on a network that enables payments to be incremental, quick and low-cost.

Since launch, our intention has been for PYUSD to be multichain as a way to offer users access, choice and flexibility while also scaling the token. Today, that intention becomes a reality. We have chosen Solana to help drive further adoption and prove PYUSD’s utility for daily use.

Several factors contributed to Solana being chosen for the PYUSD expansion, including its proven cost-effectiveness and high throughput. However, the more nuanced reason for choosing Solana relates to the unique features it enables for PYUSD; features that we believe are essential to further solidify PYUSD’s position as the preferred engine for commerce and payments.

PYUSD is enabled by Solana token extensions, bringing familiar fintech features to stablecoin payments. These token extensions are expanded on in the PYUSD Solana white paper:

• Confidential Transfers: allowing merchants the option to maintain confidentiality of transaction amounts while maintaining visibility of other transaction details for regulatory purposes. This is not dissimilar from today’s commerce – for instance, you cannot see the financial statements of your neighborhood coffee shop just because you buy from the shop daily.

• Transfer Hooks: enable PayPal developers to invoke custom programs during token transfers for individuals and merchants using PYUSD. These hooks will enable an ecosystem of useful features that mirror today’s “plug-ins” for commercial.

• Memo Fields: enables senders and receivers to include information along with payments, creating a more user-friendly experience for daily payments and record keeping.

These features are not merely nice-to-haves. We believe they are important features to provide to merchants if PYUSD is to grow in its utility to broader commercial segments. Accordingly, the launch of PYUSD on Solana will help to migrate PYUSD from the awareness to the utility phase in the long-term process of adoption. With PYUSD live on Ethereum and Solana — along with its utility on the PayPal and Venmo apps — we anticipate more tangible, UX-friendly use cases for PYUSD to emerge. In this effort, we encourage web3 and stablecoin developers to access PYUSD and begin building.

Ubiquity through Assimilation

The last and most enduring phase of the adoption of any new payments technology is ubiquity. Ubiquity is characterized by the seamless integration of the technology into daily life, where using it becomes second nature. In this stage, people use the technology effortlessly, often without conscious thought that they are using a “technology” — they are just paying.

For PayPal, ubiquity emerged as it became a way for eligible people across 200+ countries to send money to each other and to businesses. We saw PayPal's ubiquity emerge alongside digital globalization as a secure, reliable, and standardized approach to P2P, B2B, and B2C commerce.

Predictions about the future and about crypto in particular are famously unreliable. However, given our payments experience, we understand what it takes for new payment methods like PYUSD to become ubiquitous. Doing so means making transactions with PYUSD via PayPal and Venmo faster and cheaper, allowing it to be a preferred funding option for transactions. This means allowing PYUSD to move seamlessly across a decentralized multichain architecture, while also integrating effortlessly into everyday applications. In this future, using PYUSD should become so straightforward that the barrier to entry for crypto is nearly eliminated and people can use PYUSD on a daily basis without ever using the words crypto, web3, or blockchain.

Awareness, utility, and ubiquity lack clear beginnings or endings, often overlapping across regions and use cases. The decentralization of the internet and the disintermediation of finance is an ongoing process; with shifting goalposts in the months, years, and decades ahead. Regardless, PayPal continues on our journey to enable people to pay how they want, and we are thrilled to celebrate this launch with the rest of the Solana ecosystem and beyond.

To get started with PYUSD on Solana, download Phantom, Venmo, or PayPal. If you’re a builder, visit the PYUSD Solana white paper and visit the PYUSD faucet.