The competition in the stablecoin market has become more intense than ever as PayPal announced plans to offer a 3.7% annual interest rate to users holding PYUSD, a bold move aimed at attracting users and asserting its position among giants like USDT and USDC.



🔹 Attractive interest rate – Big ambitions


According to the plan, users in the US holding #PYUSD in their PayPal or Venmo wallets will receive daily interest and monthly rewards in the PYUSD coin itself. This annual interest rate of 3.7% (APY) is not only high compared to traditional savings rates but also a clear statement that PayPal is willing to invest long-term to develop its own stablecoin.


Notably, PayPal asserts that this reward does not solely come from the profits of the reserve assets, indicating that the company is 'taking losses' initially to create growth momentum for PYUSD – a strategy similar to what fintech startups often do when launching new products.



🔹 What is PYUSD and why is PayPal so aggressive about it?


PYUSD was launched in 2023, issued by Paxos and backed by assets such as US Treasury bonds, aiming to become a fast, cheap, and stable payment method. Users can use PYUSD to pay at PayPal Checkout, transfer money peer-to-peer, or convert it into fiat currency – all within the PayPal ecosystem.


However, compared to leading market stablecoins like USDT (145 billion USD) or USDC, PYUSD's market capitalization is still quite modest – about 873 million USD. This is why #Paypal must act decisively if it does not want to be left behind in the 'stablecoin race.'



🔹 Stablecoin: The new race of the 'big players'


Not only PayPal, but a number of other financial names are also jumping into the stablecoin game:



  • Coinbase has launched a rewards program with $USDC .



  • Robinhood, Revolut, Stripe, Fidelity, BBVA, and even the largest bank in the Netherlands – ING are all quietly developing their own stablecoin projects.



  • Circle, the issuer of USDC, has just announced a cross-border payment network based on stablecoin.




According to PayPal's CEO – Alex Chriss, stablecoin is the 'next step in a 10-year journey of global payment infrastructure innovation.' He believes that stablecoins have the potential to reduce costs, accelerate speed, and change the cost structure across the industry, something that traditional banking systems have yet to optimize.



🔹 What should crypto users pay attention to?


With an interest rate of 3.7% and backing from PayPal – a major player in fintech – PYUSD is gradually becoming a noteworthy option in the portfolios of investors or users looking to leverage the profitability of stablecoins.


Binance users can further monitor similar strategies, as well as staking products from popular stablecoins today to optimize profits while maintaining asset stability.



📌 In summary:

PayPal is intensifying its stablecoin game with an 'unbelievable' interest policy for PYUSD holders, ushering in a new era of combining traditional payments and crypto. The stablecoin race is entering a thrilling phase, and users – especially crypto-savvy users – will be the biggest beneficiaries.



🔔 Risk warning: Although stablecoins are more stable than other cryptocurrencies, investing or holding digital assets still carries certain risks. Always do thorough research, allocate wisely, and invest responsibly.