PayPal Offers 3.7% Yield to Boost PYUSD Stablecoin Adoption

Incentivizing PYUSD Usage in a Crowded Market

PayPal Holdings is stepping up efforts to drive adoption of its U.S. dollar-backed stablecoin, PYUSD, by launching a new rewards program. Announced on April 23 and rolling out this summer, the initiative will grant U.S.-based PayPal and Venmo users a 3.7% annual return on their PYUSD holdings, paid monthly in the same token.

According to Bloomberg, users will be able to redeem their PYUSD rewards for fiat currency, send them to others, or use them for international transfers.

Jose Fernandez da Ponte, PayPal’s SVP and GM of blockchain, crypto, and digital currencies, said the goal is to position PYUSD as a widely used payment method within the PayPal ecosystem. The move is part of PayPal’s broader strategy to gain ground in the $240 billion stablecoin market, where PYUSD’s $873 million market cap still lags far behind leaders like Tether (USDT) at around $145 billion and USD Coin (USDC) at over $61 billion, per CoinGecko data.

“We see stablecoins as building the next generation of payment rails, but we are aware that is something that takes time. We are halfway in a 10-year journey,” said da Ponte.

PayPal plans to integrate PYUSD more deeply into its platform throughout the year, aiming to cut payment costs and improve transaction speeds for its merchant and consumer base. CEO Alex Chriss noted, “We are thinking a lot about how we can change the expense profile of the payments landscape by using stablecoins.”

As competition heats up—with players like Robinhood and Revolut eyeing their own stablecoins, and some U.S. banks exploring similar offerings—PayPal’s move echoes tactics seen across the crypto industry. Coinbase, for example, already offers rewards for holding Circle’s USDC.

The rewards program underscores PayPal’s commitment to cementing PYUSD’s role in digital payments amid a rapidly evolving stablecoin landscape $BTC