PayPal is bidding to encourage uptake of its stablecoin by offering US users an annual rewards rate of 3.7% on their holdings.
Available from this summer, PayPal and Venmo users will be able to earn the rewards on their PYUSD balances. The rewards can be used immediately to send to other users, fund international transfers, exchange for fiat, or make purchases at millions of merchants with PayPal Checkout.
PayPal became the first major mainstream financial player to launch a stablecoin when it introduced PYUSD in 2023.
It still accounts for less than one per cent of the stablecoin market, well below the likes of Tether’s’ USDT and Circle’s USDC, according to CryptoQuant. However, with the market growing rapidly and benefitting from a sympathetic regulatory environment under the Trump administration, PayPal is pushing PYUSD hard.
In addition to the rewards programme, PayPal has struck a deal that will see Coinbase waive fees on transactions connected to the stablecoin. The PayPal integration means that merchants on PayPal's network can settle directly in PYUSD instead of traditional financial rails.
"At PayPal, we believe stablecoins have the power to reshape the future of commerce as the foundation for the next generation of payments. Combining this innovative technology with our expansive global network allows us to help all users thrive in the world economy," says Alex Chriss, president and CEO, PayPal.
"Consumers and businesses use PYUSD today for commerce, crypto, peer-to-peer transfers and B2B payments. We're demonstrating our commitment to an innovative, commerce-ready ecosystem by enabling it for the settlement of cross border transfers, vendor payments and in the future for additional payment use cases like payouts and bill pay."