PayPal shakes up stablecoin market with 3.7% interest rewards on PYUSD

Payment giant PayPal is rolling out a new rewards initiative that will allow US users holding its PYUSD stablecoin to earn up to 3.7% interest annually, according to an April 23 statement.

The program will begin this summer and be available across both PayPal and Venmo platforms.

PYUSD reward program

PYUSD is a US dollar-backed stablecoin that PayPal launched in 2023. The digital asset can be seamlessly converted into fiat or other cryptocurrencies or used directly for purchases and peer-to-peer transfers.

According to the company, the initiative aims to boost real-world usage of PYUSD by rewarding users for simply holding the asset. It added that rewards will be accrued daily, and payouts will be made monthly.

Beyond earning interest, users will have multiple ways to put their rewards to use. The stablecoin can be spent at millions of supported merchants, sent to friends or family via PayPal and Venmo, or used for remittances through Xoom with no transaction fees. It can also be transferred on-chain using Ethereum or Solana wallets, giving users more control over their digital assets.

Alex Chriss, PayPals President and CEO, highlighted the broader vision for PYUSD. He said the stablecoin is already integrated into various financial activities, including commerce, business payments, and crypto transactions.

Chriss added that PayPal will unlock more use cases soon, including vendor payouts and bill payments.

PYUSD is the eighth-largest stablecoin with a market valuation of around $873 million. It operates on Ethereum and Solana blockchains, ensuring compatibility with various decentralized applications.

Stablecoin market heats up

PayPals move comes amid increasing competition in the stablecoin market. Several major fintech companies, including Robinhood, are exploring their stablecoin products.

This competitive shift comes amid active legislative developments in the US Congress. Lawmakers are reviewing two major regulatory proposals, the STABLE Act and the GENIUS Act, which aim to establish clear frameworks for issuing and backing stablecoins.

Standard Chartered has projected that these bills could allow the sector to expand to as much as $2 trillion by 2028.

Currently, Tethers USDT remains the dominant force in the sector with over $145 billion in circulation. Circles USDC and USDS (formerly Dai) follow with market caps of approximately $62.7 billion and $7 billion, respectively.

The post PayPal shakes up stablecoin market with 3.7% interest rewards on PYUSD appeared first on CryptoSlate.

Text source: CryptoSlate

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