PayPal offers 3.7% yield on PYUSD stablecoin to boost adoption

April 23, 2025 - In order to boost adoption of its stablecoin, PayPal is launching a 3.7% annual reward on PayPal USD (PYUSD) holdings for U.S. users starting this summer.

The program, available via PayPal and Venmo, is part of the company’s strategy to reposition PYUSD as more than a crypto trading tool.

Users will receive the rewards in PYUSD, calculated daily and paid monthly, as long as they hold the token in their PayPal or Venmo wallets.

The stablecoin, launched in 2023 and issued by Paxos Trust Company, is pegged 1:1 to the U.S. dollar and backed by dollar deposits and short-term Treasuries. 

PYUSD (PayPal USD) stablecoin operates primarily on two blockchains: Ethereum and Solana.

“Our goal is to reshape the future of commerce,” said PayPal CEO Alex Chriss.

“Stablecoins like PYUSD can help make payments faster and cheaper, and this rewards program is designed to get users spending and moving it like real money.”

PayPal's blockchain lead, Jose Fernandez da Ponte, confirmed that the rewards aren’t tied to Fed interest rates or U.S. Treasury yields, unlike some competitors.

“We’re not even halfway through our 10-year plan,” he said, emphasizing that the incentives are about building PYUSD into a real payment tool, not just a store of value.

Until now, PYUSD has mainly been used for crypto-related transfers.

With this move, PayPal wants to make it central to its global payment ecosystem, whether for person-to-person transfers, merchant payments, or international remittances via Xoom.

The program will allow users to:

• Earn rewards daily, paid out monthly.
• Spend PYUSD at millions of PayPal merchants.
• Convert it to fiat or other cryptocurrencies.
• Send it onchain via Ethereum and Solana.
• Fund remittances with no transaction fees.

With a current market cap of roughly $873 million, PYUSD still lags far behind dominant players like Tether’s $145 billion USDT. But PayPal’s new push is a clear signal it wants to catch up fast.

The stablecoin space is heating up. Competitors like Coinbase, Robinhood, Stripe, and Fidelity are all making moves, and even Circle just rolled out a new network to help businesses settle payments with USDC.

PayPal, the first major financial firm to launch a stablecoin, is now doubling down to stay relevant in a market that’s quickly crowding. The reward program is a bold bet that users will start using PYUSD like real money.