PayPal is upping the ante in the stablecoin wars as itโs set to begin offering U.S. users 3.7% annual returns on balances of its PayPal USD (PYUSD) stablecoin.
The yield, accrued daily and paid monthly in PYUSD, is designed to spur adoption by making the token more appealing and stand out among the competition, Bloomberg reported.
Set to launch this summer, the program will allow users to earn rewards while keeping their stablecoins in PayPal and Venmo wallets. The stablecoin can be spent via PayPal Checkout, transferred to other users, or converted to traditional dollars.
โWe are halfway in a 10-year journey,โ said Jose Fernandez da Ponte, PayPalโs head of blockchain and digital currencies. The aim, he added, is to build a new set of payment rails that reduce costs and improve speed. CEO Alex Chriss echoed the point, saying stablecoins offer a chance to reshape the economics of the payment landscape.
Launched in 2023, PYUSD is issued by Paxos Trust and backed by reserves like U.S. Treasuries. Despite PayPalโs brand recognition, PYUSDโs market share remains small โ about $868 million โ compared to market leader Tetherโs $143 billion USDT, according to RWA.xyz data.
The move is also part of PayPalโs ongoing cryptocurrency push. Earlier this month, the firm added chainlink (LINK) and solana (SOL) to its growing list of supported cryptocurrencies.
