PayPal to Offer 3.7% Annual Yield on PYUSD to Drive Stablecoin Adoption
In a bid to increase adoption of its PayPal USD (PYUSD) stablecoin, PayPal has announced plans to offer U.S. customers a 3.7% annual yield on their PYUSD balances, marking a significant move in the growing stablecoin space.
The interest will be accrued daily and paid monthly in PYUSD, aiming to make the stablecoin more appealing to users and differentiate it from competing digital assets, Bloomberg reports.
The new program, set to launch this summer, will allow users to earn rewards while holding their PYUSD in PayPal and Venmo wallets. PYUSD can also be used for purchases via PayPal Checkout, transferred to others, or converted into traditional U.S. dollars.
“We are halfway through a 10-year journey,” said Jose Fernandez da Ponte, PayPal’s head of blockchain and digital currencies, noting that the company’s goal is to build faster, more cost-efficient payment infrastructure. PayPal CEO Alex Chriss added that stablecoins offer the potential to reshape the financial industry by offering a more efficient economic model.
PYUSD, launched in 2023, is issued by Paxos Trust and is backed by U.S. Treasury reserves. While PayPal has a strong brand presence, PYUSD’s market share remains small, with a current market cap of $868 million, compared to the dominant Tether (USDT) at $143 billion, according to RWA.xyz data.
This new yield offering is part of PayPal’s continued expansion into the cryptocurrency sector. Earlier this month, the company added Chainlink (LINK) and Solana (SOL) to its list of supported digital assets.
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