PayPal to Offer 3.7% Yield on PYUSD Stablecoin to U.S. Users

PayPal will soon offer U.S. users a 3.7% annual return on its dollar-backed stablecoin, PayPal USD (PYUSD), as part of a broader push to grow its presence in digital assets.

The new program is set to launch this summer and will reward users with daily yield accruals, paid out monthly in PYUSD. The offer applies to balances held in PayPal and Venmo wallets, where users can spend, send, or convert the stablecoin to cash.

The move seeks to boost adoption of PYUSD by making it more competitive in the stablecoin market, where it lags behind leaders like Tether (USDT). PYUSD currently holds a market cap of around $868 million, while Tether’s stands at $143 billion. Despite initially surpassing Ethereum in PYUSD supply on Solana, the Solana-based supply has since dropped below Ethereum’s.

Jose Fernandez da Ponte, PayPal’s head of blockchain and digital currencies, said the company is building new payment infrastructure to reduce transaction costs and increase speed. CEO Alex Chriss added that stablecoins present an opportunity to change how payment systems operate at their core.

PayPal has been steadily expanding its crypto offerings, recently adding support for assets like Chainlink (LINK) and Solana (SOL) as part of its ongoing integration of digital currencies into its ecosystem.

Launched in 2023, PYUSD ia backed by U.S. dollar deposits, short-term U.S. Treasuries, and cash equivalents. The token is issued by Paxos Trust and is one of the first consumer-facing stablecoins launched by a major financial services firm.

PayPal has actively sought to expand its presence in the digital assets market, recently announcing plans to allow U.S. business customers to buy, sell, hold, and transfer cryptocurrencies. Additionally, users in all supported countries, excluding Canada, can now buy PYUSD through MoonPay using major payment methods.

The integration is said to address issues related to declined crypto purchases via debit card, with MoonPay asserting that it will improve the success rate of crypto transactions, even when using the same debit card. Furthermore, existing PayPal users will no longer need to manually input their card information when buying cryptocurrencies on MoonPay.