PayPal is set to introduce a new feature offering a 3.7% yield on balances held in its PayPal USD stablecoin, according to a Bloomberg report on April 23. The move aims to boost the usage of the firm’s stablecoin and is expected to roll out this summer, with rewards paid out in PayPal USD (PYUSD). Users will have the flexibility to exchange PYUSD for fiat currency, make purchases, or transfer it to other users, with rewards accruing daily and paid monthly. PayPal hopes this initiative will drive more stablecoin and cryptocurrency transactions on its platform. The stablecoin reached a $1 billion market cap in the summer of 2024 but is currently valued at $873.3 million. Tzahi Kanza, CEO of Syndika, emphasized the regulatory challenge for PayPal to offer interest without risking the stablecoin being classified as a security. He highlighted the importance for PayPal to maintain the stablecoin’s peg to the dollar. PayPal’s foray into blockchain technology extends to its recent addition of Chainlink (LINK) and Solana (SOL) for US-based users to buy, sell, and transfer tokens. PayPal’s introduction of PYUSD stablecoin in August 2023 marked a significant milestone as the first major payment network to launch its own stablecoin, compliant with ERC-20 Ethereum standards and later deployed on Solana. Despite its growth, PYUSD lags behind Tether’s USDT in market cap, prompting experts to suggest focusing on compliance, transparency, and returns to enhance competitiveness.
