PayPal will initiate a new program this summer that allows U.S. users to earn a 3.7% yearly reward on the PayPal USD (PYUSD) stablecoin.
PayPal is introducing a new program this summer that will allow U.S. users to earn a 3.7% yearly reward in the company's PayPal USD (PYUSD) stablecoin, according to Bloomberg.
The rewards will be paid in PYUSD and credited to user accounts daily, with complete payouts each month. People can then use those rewards for payments, transfers, or exchange them to cash.
"The yield will accrue every day and be rewarded monthly to incentivize individuals to utilize PayPal's stablecoin for transactions," said Jose Fernandez da Ponte, PayPal's blockchain and crypto head.
Right now, most stablecoins, including PYUSD, are used for crypto trading. But PayPal sees them as the future of faster, cheaper everyday payments, like buying things online or sending money abroad.
"We're trying to bring cost out of the payments ecosystem with the adoption of stablecoins," CEO Alex Chriss said.
Since PYUSD's launch, big names like Robinhood, Revolut, Stripe, and Fidelity have entered the stablecoin space, increasing competition. Circle is also expanding by launching a network for cross-border payments using stablecoins.
Stablecoins are becoming a profitable part of crypto since they're backed by assets like U.S. Treasuries. But the 3.7% reward isn't tied to Fed rates or just the interest from those reserves. Instead, PayPal is investing in this program to grow PYUSD's use and value.
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