Can Solana Become the Ultimate Chain for Stablecoins?

In October 2025, Wall Street Journal reported that Western Union, the gargantuan financial services firm, plans to launch its own stablecoin. Launching in 2026, this stablecoin called U.S. Dollar Payment Token, or USDPT, will enable users to send and receive dollar-backed transfers on the Solana blockchain while being issued by Anchorage Digital Bank. Western Union boldly claims using USDPT could be a cheaper and faster way to send money.

Over 150 years ago, Western Union built the first transcontinental telegraph line, and now it is launching a stablecoin, a similar innovation on Solana. Since I learnt about this move, I have been intrigued about the implications which led me to write this article. This article is my attempt to answer my question: does Solana have what it takes to be the number one chain for stablecoins? Why am I asking that question? You see, stablecoins like USDC, USDT and PYUSD are available on Solana, however, USDPT will be the first stablecoin to be launched on Solana first before going multichain. Ethereum already holds the bulk of stablecoin volume and the M.O. is for stablecoins to launch first on Ethereum, then Solana while it trickles to other chains.

And you can’t blame them. Ethereum is the 2nd largest blockchain with an advantage over Bitcoin; its virtual machine allows for internet capital markets and DeFi. Hence the dominance in DeFi and ultimately stablecoins which power DeFi.

What is Solana Lacking?

In my opinion, Solana has the technical infrastructure and momentum to challenge Ethereum for the number one stablecoin position. Yet, it is not a slam dunk nor is it something that will happen immediately. CC DeFillama, total stablecoin supply (at the time of writing) is $308.6 billion, up from $250+ billion in 2024. Ethereum is the most dominant with its stablecoin supply ($165.2 billion) taking ~ 53.47% of the $308.6 billlion pie. This massive number is partly due to institutional trust (most USDC and DAI are issued there) while it also has the most mature DeFi ecosystem. Tron follows closely: $80.99 billion which is ~26.244% of the full market, favored because of its cheap transfers. Solana is next with a stablecoin supply of $15.7 billion, ~5.08% of the stablecoin market cap.

Let’s break it down and see what this means for Solana. Firstly, Ethereum’s moat is huge. Its stablecoin supply is 10X that of Solana’s. Most T-bill reserves for stablecoins are ETH-tied, about $155 billion in T-bills held by issuers while institutions prefer ETH’s decentralization over Solana’s perceived centralization (fewer validators, VC-heavy). Solana also has competition from other chains to worry about. For instance, BNB Chain is launching a new stablecoin, U, targeting institutions, with a $300 billion market as backdrop. We also have Polygon, Avalanche, and even Hyperliquid siphoning growth.

Moving on, Solana withstood a week-long DDoS attack in Dec 2025, and while network operations were stable, concerns linger that if Solana maintains its trajectory, stablecoin transactions could suffer badly. What I mean is that, if memecoin trading growth on Solana continues, memecoin spam clogs occur. Also, regulatory scrutiny post-GENIUS could see Solana as the “degen” chain which could reduce institution interest. Thankfully, Solana is pivoting to payments and ICM (Internet Capital Markets) so that image should change. Doing so would take Solana’s stablecoin’s supply from its current state to the point analysts have speculated.

What is Solana Doing Right?

Solana has strong technical infrastructure and some institutional adoption that makes it a formidable contender in the stablecoin market. Yet, it trails Ethereum and Tron in total stablecoin supply. To become the number one chain for stablecoins, Solana needs to keep doing what it’s doing while experiencing exponential ecosystem growth. That said, here are features of the Solana blockchain that makes a bull case for more of the stablecoin pie.

1. Low Cost: I’ve been using Solana since 2021 and its transaction fees have been consistently low; a fraction of a cent. Because of the low costs, micro-transactions and massive volume transactions are possible for both retail users and businesses.
2. Speed and Efficiency: Solana boasts a high throughput of thousands of transactions per seconds with sub-second finality. This speed is important for high-frequency trading, real-time payments and cross-border settlements.
3. Solid Infrastructure: Solana’s architecture, including its unique consensus mechanism of both Proof-of-History (PoH), Proof-of-Stake (PoS) and its high throughput shows its designed for scale. Additionally, features like token extensions allow issuers to embed compliance features (e.g., confidential balances, transfer hooks) directly into stablecoins, appealing to regulated entities.
4. Institutional Adoption: Major traditional finance and payment companies are integrating Solana’s stablecoins. For instance; Visa is using Solana for USDC settlement, Stripe has added support for Solana-based USDC payments, while PayPal expanded its PYUSD stablecoin to the network in May 2024.

What are the Major Stablecoin Players on Solana?

USDC (Circle)

Supply: $10.3 billion

Issuer: Circle

USDC is both the standard for institutional treasury management and the largest stablecoin on Solana. Circle backs every USDC with cash and short-duration U.S. Treasuries held in segregated accounts at banks like BNY Mellon. Daily reporting on Circle’s portfolio is available via Blackrock. Many enterprises choose USDC specifically because of its off-ramp featuresand if you’re generating revenue onchain, USDC offers the cleanest path back to traditional banking.

USDT (Tether)

Supply: $2.074 billion

Issuer: Tether Limited

Tether is the second-largest stablecoin on the network. Tether backs USDT with U.S. Treasuries, cash, reverse repossessions and other liquid assets. For institutional users, USDT offers redemptions (minimum $100,000). To follow Tether’s portfolio you can check their assurance reports released every quarter.

PayPal USD (PYUSD)

Supply: $1.094 billion

Issuer: PayPal and Paxos Trust

PUSD became the first major stablecoin to fully leverage Solana’s Token Extensions. Issuance of PYUSD is handled by Paxos on behalf of Paypal and is backed by USD deposits, U.S. Treasuries, and reverse repos. PayPal’s integration gives PYUSD a unique on-ramp: buy PYUSD directly through PayPal accounts. The stablecoin uses permanent delegates, transfer hooks, and transfer fees to enforce compliance. You can follow PYUSD via the attestation reports here.

Global Dollar (USDG)

Supply: $893.38m

Issuer: Global Dollar Network/Paxos Digital

USDG was created as a consortium stablecoin, backed by USD deposits and short-duration U.S. government securities and is regulated by the Monetary Authority of Singapore (MAS). The stablecoin is built with Solana’s Token Extensions for compliance. It also offers revenue-sharing for network partners. Custodians include Paxos and Anchorage with banking partners DBS, Dreyfus, Standard Chartered, and Banking Circle.

Final Verdict?

Projections suggest the overall stablecoin market could hit $500–670 billion by 2027–2028.

Short-Term Outlook (2026): Expected Growth and Flips

In 2026, Solana’s stablecoin market cap could surge to $40–80 billion, flipping Tron and BNB in stablecoin transfer volume. This surge will be driven by payments adoption. Moving on, Visa announced this December the launch of USDC settlements for US banks on Solana; settlements that were already handling $3.5 billion in annualized volume. More success would make Solana a go-to for institutional rails, with banks integrating the technology for faster settlements. We also have Firedancer’s mainnet rollout this December which now powers over 20% of validators and enables 600,000+ TPS in tests. Expect stablecoins to attain US ACH volumes as Solana captures more remittances and DeFi inflows, with 30–40% YoY growth if regulatory tailwinds from the GENIUS Act hold.

Long-Term Outlook (2027+)

By 2027–2028, Solana could claim number one with $150–250 billion in supply (25–40% market share) if the global market reaches $600–670 billion, but this requires flawless scaling, broader issuer adoption (e.g., more stablecoins like PYUSD, USDPT, new euro/pegged assets), and dominance in RWAs/tokenization. Conditions include: Visa/Coinbase expansions pulling $20–50 billion more in liquidity; Ethereum L2s failing to match Solana’s native speed for high-volume payments; and $1.4 trillion in extra USD demand from stablecoins favoring Solana’s ecosystem for emerging markets.

If Bitcoin hits $250K by 2027 amid general crypto boom, Solana benefits from correlated inflows, but macro risks like IMF warnings on stability could cap growth if not addressed.

Final Assessment: Bullish Case with Key Watchpoints

I’m bullish. Solana’s undervalued on traction metrics (eg: its YTD growth ratio vs Ethereum’s), with Visa’s U.S. rollout and Firedancer signaling a pivot to enterprise-grade stability. It could 5–10x its supply by 2028 becoming the payments backbone. Watchpoints: Network congestion from memecoin/degen spam; Ethereum’s institutional moat (e.g., T-bill reserves); and regulatory shifts post-2025 clarity.

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Can Solana Become the Ultimate Chain for Stablecoins? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.