Solana jumps after Visa’s stablecoin announcement

The Solana blockchain’s native token jumped on Tuesday after Visa announced it would expand its stablecoin capabilities to include an Ethereum alternative.

The Solana token was last up 4.39% at $20.25, according to Coin Metrics. And at one point it increased by as much as 6%. Other cryptocurrencies were little changed, with Bitcoin hovering below the flatline at $25,803.25, while Ethereum was slightly higher at $1,640.06.

The move came after Visa announced that it would be offering settlement of the USDC stablecoin via the Solana network. The payments giant said in a statement that the development could help “improve cross-border settlement speed and provide a modern option for our customers to easily send or receive money from Visa’s vault.”

Solana is one of several networks aiming to compete with Ethereum. It is popular among developers, who may choose to build applications on it instead of Ethereum due to its speed and cost-effectiveness. Its year-to-date gain is one of the largest in the cryptocurrency market at 101%.

The announcement follows the launch of the PayPal-branded stablecoin, PayPal USD. The company said PayPal USD’s job is to reduce friction for test payments at default settings and allow direct flows for developers.

Visa has been experimenting with USDC, the market’s second-largest stablecoin, since 2021, to explore how it can be used within its treasury operations to make currency conversion in cross-border payments shorter and cheaper.

Bernstein has called stablecoins the “killer brutal app” of cryptocurrency, and identified it as a market worth nearly $3 trillion over the next five years.

“We expect major global financial and consumer platforms to issue co-branded stablecoins to enhance the exchange of value on their platforms,” Bernstein said. “Going forward, we expect the value of the tokenized stablecoin to hit a $2.8 trillion market, led by local regulated stablecoins.”