PayPal to Offer 3.7% Yearly Yield on PYUSD Stablecoin to Drive Usage Growth

PayPal to Introduce 3.7% Annual Yield on PYUSD to Drive Stablecoin Adoption

In an effort to bolster the use of its PayPal USD (PYUSD) stablecoin, PayPal is launching a program that offers U.S. users a 3.7% annual yield on their PYUSD holdings.

The yield, which will be credited daily and paid out monthly in PYUSD, aims to make the stablecoin more attractive and encourage wider adoption as competition in the stablecoin market intensifies, according to Bloomberg.

Scheduled to roll out this summer, the program will allow users to earn rewards while holding their stablecoins in PayPal and Venmo wallets. PYUSD can be used for transactions via PayPal Checkout, transferred between users, or converted to traditional currency.

“We’re in the midst of a 10-year journey,” said Jose Fernandez da Ponte, PayPal’s head of blockchain and digital currencies. He added that the goal is to build new payment infrastructures that reduce transaction costs and increase speed. CEO Alex Chriss also highlighted how stablecoins could reshape the economics of global payments.

Launched in 2023, PYUSD is issued by Paxos Trust and backed by U.S. Treasuries and other reserves. Despite PayPal’s widespread brand recognition, PYUSD’s market capitalization remains modest at $868 million, far behind Tether’s (USDT) massive $143 billion, according to data from RWA.xyz.

This initiative also aligns with PayPal’s ongoing strategy to expand its cryptocurrency services. Earlier this month, the company added Chainlink (LINK) and Solana (SOL) to its list of supported digital assets.