PayPal Launches New Rewards System That Will Pay Users in PYUSD

It could soon be raining money, so it is time to get soaking wet! To keep up with the ever-evolving cryptocurrency world, PayPal officially launched a new rewards

PayPal is launching a new rewards system that will pay out monthly in a cryptocurrency of your choice. It is also increasing the yield offered on its PayPal USD (PYUSD) stablecoin to 3.7%.

These changes might be crucial if you currently have PYSUD in your PayPal or Venmo wallet. PayPal recently announced that it will offer a 3.7% yield on PYUSD to amplify usage. The Bloomberg (paywall) report follows after PayPal USD reached a $1 billion market cap in the summer.

Consumers can continue to accumulate daily rewards and according to Bloomberg, consumers will be rewarded monthly in payment with the stablecoin. The rewards will be added directly to the participants’ cryptocurrency hub where you can use the rewards immediately. The program will be launched soon and consumers can expect the annual boosted rewards to be paid out in PayPal USD, which is currently $0.9997. Those who wish to opt out of the rewards system can do so at any time and exchange their rewards for US dollars.

What is PayPal USD stablecoin?

PayPal USD, or PYUSD, is a US fixed exchange rate stablecoin and was issued by Paxos Trust Company on behalf of PayPal in August.

PayPal became the first major payment network to launch its stablecoin, with Venmo also announcing support for the stablecoin in September.

Each stablecoin is supposedly backed one-to-one by cash deposits, short-term US Treasury notes, and similar cash-equivalent assets in accounts that are overseen by the New York State Department of Financial Services. At first, PYUSD was a stablecoin compliant with the ERC-20 Ethereum standard, but it has since also been launched on Solana (SOL).

Consumers should note that earning crypto rewards differs from earning US dollars. Money placed in a high-yield savings account with a 3.7% APY will result in interest that retains its value. So if you earned $5 in interest, you’ll still have that $5 next month, even if the account’s APY changes. On the other hand, 3.7% of rewards in PYUSD at the value of $40 might be worth $3 the next month (or even the next day). Cryptocurrency, of course, fluctuates in value but is considered much more volatile.

What you can do with PayPal USD stablecoin

Consumers may exchange PYUSD for fiat currency, spend it, or send it to someone else. PayPal hopes the new rewards system will cause a higher prevalence of stablecoin and crypto payments on its platform.

“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.” – Alex Chriss, president and CEO of PayPal.

Consumers may use their rewards at any time in a few ways, including:

Send rewards directly to other PayPal or Venmo users

Convert rewards into US dollars for your PayPal or Venmo balance

Shop using PayPal Checkout

Convert rewards to other cryptocurrencies

Cryptocurrency has many benefits, including inflation protection, cross-border payments, diversification, transparency, cost reductions, fraud protection, lower fees, and investment opportunities, to mention a few.

This new rewards system will be celebrated by many users, but if you remain uncertain or want to know a little bit more, have a look at PayPal’s official statement on the rewards system. We know change can be scary, but sometimes it is necessary.