Cryptocurrency’s original use case – payments – is getting a boost on the Solana blockchain.
New software co-developed by Solana Labs intends to help merchants accept crypto payments over the Solana network. Checkout.com, Circle and Citcon are supporting “Solana Pay,” which debuted Tuesday with integrations with crypto exchange FTX and ecosystem wallets Phantom and Slope.
The software development kit (SDK) takes crypto in and spits crypto out. Obvious, maybe – but a notable difference from some of the market’s better-known crypto-to-fiat rails. Virtually every merchant paid with a “crypto credit card” sees their payments settled in cash.
Crypto payments have been central to the industry since the Bitcoin white paper touted “peer-to-peer electronic cash” over a decade ago. But a mix of price volatility, slow on-chain settlement and tax headaches hampered growth, said Sheraz Shere, head of payments for Solana Labs.
“Now that we have a blockchain that has the throughput, speed and scalability and low fees of traditional payment networks – 50,000 transactions per second and sub-second transfer times, we can potentially build a merchant payment system that’s truly on the blockchain, and most importantly, that’s peer-to-peer and decentralized and permissionless,” Shere said.
Technically any SPL token can flow through Solana Pay. But the protocol’s backers are particularly keen on payments in Solana-native USDC.
The ecosystem already has $4 billion of Circle’s dollar-pegged stablecoin sloshing about, a figure second only to Ethereum in size.
A non-custodial service, the open-source package, which Shere said anyone could implement, does not take a slice of payments. Customers will still have to pay network fees; on Solana, that’s well below 1/100th of a penny.
The state of play for merchants is only a tad more complicated. Plugging into Solana Pay through a third-party like Checkout.com, they might pay a minimal service charge. They could set it up themselves for zero fees, he said.
Customer payments are only the start, Shere said. He’s “thinking about a future where stablecoins like USDC are the transactional currency,” underpinning everything from payroll to invoices.
That said, Solana has seen its fair share of hiccups lately. Continued network slowdowns could set back the stated vision, though a spokesperson for Solana Labs said that USDC transfers are simple to execute and unlikely to add stress.