According to a Bloomberg report, U.S. payment giant PayPal intends to provide rewards for holders of its stablecoin, PayPal USD (PYUSD), to encourage wider adoption of the digital token in an increasingly competitive market.
Key Features of the PYUSD Reward Program
- 3.7% Annual Yield: U.S. users of PayPal and Venmo can earn rewards by holding PYUSD in their platform wallets.
- Flexible Redemption: Rewards are distributed in PYUSD, which can be converted to fiat, transferred, used for cross-border remittances, or spent via PayPal Checkout.
- Launch Timeline: The program is expected to roll out in summer 2025.
Jose Fernandez da Ponte, PayPal’s SVP and General Manager of Blockchain, Crypto, and Digital Currencies, emphasized that the daily-calculated, monthly-distributed rewards aim to position PYUSD as a preferred payment tool across PayPal’s ecosystem.
PYUSD: A Trusted Stablecoin
PYUSD is issued in collaboration with Paxos Trust Company and backed 1:1 by:
- U.S. dollar deposits
- Short-term U.S. Treasuries
- Cash equivalents
👉 Discover how PYUSD compares to other stablecoins
Stablecoin Market Context
Stablecoins like PYUSD generate revenue through interest-bearing reserves (e.g., U.S. Treasuries). However, da Ponte clarified that PYUSD rewards are not tied to Federal Reserve rates and won’t rely solely on reserve-generated interest.
Market Share Snapshot (via DefiLlama):
| Stablecoin | Market Cap |
|------------|------------------|
| USDT | ~$145.7 billion |
| USDC | ~$61.7 billion |
| PYUSD | ~$879 million |
FAQs
Q: How do I qualify for PYUSD rewards?
A: Hold PYUSD in your PayPal or Venmo wallet (U.S. users only).
Q: Can rewards be compounded?
A: No—rewards are distributed as separate PYUSD holdings.
Q: Is PYUSD available globally?
A: Currently limited to U.S. PayPal/Venmo users.
👉 Explore PYUSD’s DeFi integration potential