PayPal to Boost PYUSD Adoption with 3.7% Annual Yield on Stablecoin Balances
In an effort to strengthen the appeal of its PayPal USD (PYUSD) stablecoin, PayPal is rolling out a new program offering U.S. users a 3.7% annual yield on their PYUSD holdings, a move designed to enhance the token’s adoption and set it apart in the competitive stablecoin market.
The yield will be calculated daily and paid out monthly in PYUSD, offering users an incentive to hold their stablecoins within PayPal and Venmo wallets. This initiative, scheduled for launch this summer, aims to position PYUSD as a more attractive alternative for users, offering rewards while still allowing for flexible transactions, such as spending via PayPal Checkout, transferring to other users, or converting back to traditional currency.
“We’re halfway through a 10-year journey,” explained Jose Fernandez da Ponte, PayPal’s head of blockchain and digital currencies. The goal, he said, is to develop new payment infrastructure that cuts costs and accelerates transactions. PayPal CEO Alex Chriss emphasized that stablecoins present an opportunity to overhaul the payment landscape with more efficient economic models.
Since its launch in 2023, PYUSD has been issued by Paxos Trust and is backed by reserves, including U.S. Treasuries. Despite PayPal’s strong brand recognition, PYUSD’s market share remains modest, totaling $868 million, in stark contrast to the leading Tether (USDT), which holds a market cap of $143 billion, according to RWA.xyz data.
This latest initiative is part of PayPal’s broader strategy to expand its cryptocurrency offerings. Earlier this month, the company also added Chainlink (LINK) and Solana (SOL) to its supported digital asset portfolio.
