Bank of America believes the Solana blockchain could become the “Visa of the digital asset ecosystem” with its focus on ease of use, scalability and low transaction fees, according to a research note sent to BoA clients.
The note was sent after BoA hosted Solana Foundation member Lily Liu, per a CoinDesk report Wednesday (Jan. 12).
Solana has settled more than 50 billion transactions, including more than $11 billion in total value locked and in excess of 5.7 million non-fungible tokens (NFTs) minted, since it launched in 2020.
Visa, by comparison, processed 164.7 billion transactions in the year ending Sept. 30, 2021.
Solana is primarily used for consumer cases such as micropayments and gaming, analyst Alkesh Shah wrote in the note published Tuesday (Jan. 11).
“Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has trade-offs, illustrated by several network performance issues since inception,” Shah wrote in the note.
“Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent,” he continued.
Solana and other blockchains could grab more market share from ethereum over time, according to BoA’s analysis, and set themselves apart through user adoption and developer interest.
The Solana blockchain became an official chain for the U.S. digital coin (USDC) in October 2020, continuing the growth of USDC as an open standard and protocol for fiat cryptocurrency on blockchains. USDC for Solana is available on the Solana Mainnet.
Payments-related stablecoins are in the crosshairs for the Hong Kong Monetary Authority (HKMA) as it looks to regulate cryptocurrencies, according to the “Discussion Paper on Crypto-assets and Stablecoins.”
See also: Hong Kong Monetary Authority Calls Stablecoins Crypto’s Greatest Threat
Stablecoins are cryptocurrencies that are largely backed one-to-one by fiat currencies — generally U.S. dollars — or highly liquid investments to maintain an equal peg with that currency.
HKMA believes that some stablecoins have a high “possibility of becoming a widely accepted means of payments, i.e. ‘payment-related stablecoins,’ thus raising broader monetary and financial implications,” according to its report.
It also “sees the need to ensure that payment-related stablecoins are appropriately regulated before they operate in Hong Kong or are marketed to the public of Hong Kong.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More