PayPal is introducing a new rewards initiative for its PYUSD stablecoin, allowing users to earn up to 3.7% interest annually. PYUSD is a US dollar-backed stablecoin that can be easily converted into fiat or other cryptocurrencies. The program will begin this summer and will be available on both PayPal and Venmo platforms. Users will earn rewards for simply holding the asset, with payouts made monthly and rewards accrued daily.
Users will have multiple options for using their rewards, including spending at supported merchants, sending to friends or family, remittances through Xoom with no transaction fees, and transferring on-chain using Ethereum or Solana wallets. PayPal’s President and CEO, Alex Chriss, highlighted the broad range of use cases for PYUSD, including commerce, business payments, and crypto transactions. PayPal plans to introduce more use cases in the future, such as vendor payouts and bill payments.
PYUSD is currently the eighth-largest stablecoin with a market valuation of around $873 million. It operates on Ethereum and Solana blockchains, ensuring compatibility with various decentralized applications. This move by PayPal comes as competition in the stablecoin market heats up, with companies like Robinhood exploring their stablecoin products. Legislative developments in the US Congress, such as the STABLE Act and the GENIUS Act, aim to establish clear frameworks for issuing and backing stablecoins, potentially allowing the sector to expand to $2 trillion by 2028.
Currently, Tether’s USDT is the dominant force in the stablecoin market with over $145 billion in circulation. Circle’s USDC and USDS (formerly Dai) follow with market caps of approximately $62.7 billion and $7 billion, respectively. As the stablecoin market continues to evolve, PayPal’s rewards initiative for PYUSD aims to drive real-world usage of the stablecoin and offer users a variety of ways to benefit from holding the asset.
