PayPal to Offer U.S. Users 3.7% Yield on PYUSD Stablecoin Starting This Summer

PayPal Holdings Inc. is set to offer U.S. users a 3.7% annual yield on balances of its PayPal USD (PYUSD) stablecoin, starting this summer. The yield, which will accrue daily and be paid monthly, aims to boost the adoption of PYUSD amid increasing competition in the stablecoin market. Users can also earn rewards through PayPal and Venmo wallets.

The initiative is part of PayPal's broader strategy to enhance the attractiveness of its stablecoin, which can be used for transactions through PayPal Checkout, transferred to other users, or converted to traditional dollars. This move comes as PayPal continues to expand its cryptocurrency offerings, having recently added support for chainlink (LINK) and solana (SOL). Jose Fernandez da Ponte, PayPal's head of blockchain and digital currencies, stated that the company is halfway through a 10-year journey to build new payment rails that reduce costs and improve speed. CEO Alex Chriss emphasized the potential of stablecoins to reshape the economics of the payment landscape.

PYUSD, issued by Paxos Trust and backed by reserves like U.S. Treasuries, currently holds a market share of approximately $868 million, significantly smaller than market leader Tether's $143 billion USDT. PayPal's efforts to incentivize the use of PYUSD reflect its ambition to reshape the economics of the payment landscape. Paxos, a proud partner of PayPal, supports the issuance of PYUSD, furthering mainstream adoption of stablecoins.

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