PayPal to offer a 3.7% annual return on its stablecoin, PYUSD, in a move to draw more users

PayPal plans to launch the new program this summer to boost the use of its native token, PYUSD. By Samuel M. Output.

PayPal is planning to offer a 3.7% annual return on its stablecoin, PYUSD, in an effort to draw more users and gain a foothold in a market already led by stronger competitors. The goal is to engage users and drive broader adoption of the token.

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The aim is to launch the new program this summer to boost the use of its native token, PYUSD. People in the U.S. who hold PYUSD in their PayPal or Venmo wallets will earn the return, paid monthly in the same coin. The ‘return’ will accrue daily and users can choose to either spend, send, convert, or use it for international transfers.

PayPal's blockchain leader, Jose Fernandez da Ponte, said that the reward is meant to make PYUSD a true payment option. He also mentioned that the company is only halfway through their long-term 10-year plan.

“We see this as a way to increase the engagement with PYUSD and get broader adoption,” da Ponte said. “It’s a key part of our strategy to make PYUSD the best-performing stablecoin.”

PYUSD was first launched by PayPal in partnership with Paxos, making it the first major financial firm to launch stablecoin options. The token is pegged one-to-one to the U.S. dollar and is said to be fully backed by U.S. cash, Treasury bills, and other similar safe holdings, which are kept in accounts monitored by New York’s financial regulator.

Paxos, a crypto company licensed by the state, handles all issuing processes for the stablecoin. PYUSD is launched on Ethereum using the ERC-20 format and later expands to Solana for faster and lower-cost transactions. It competes with other stablecoins linked to the U.S. dollar, such as USDC from Circle.

News data source: kdj.com

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