PayPal Introduces Financial Incentives for PYUSD Stablecoin Holders

Payment giant PayPal is launching a loyalty program that rewards users for holding its PayPal USD (PYUSD) stablecoin in PayPal and Venmo wallets.

PayPal announced the launch of a new loyalty initiative for U.S. users, offering a 3.7% annual yield in PYUSD, paid on wallet balances.

Key features of PayPal’s loyalty program:

• interest is accrued daily and paid monthly in PYUSD;
• earned rewards can be converted into fiat, used for purchases, or transferred;
• the service is available only to PayPal and Venmo users in the United States.

According to Bloomberg, PayPal’s incentive program is the first of its kind, as major U.S. financial platforms were previously unable to offer fixed yields on stablecoin holdings.

This initiative aims to boost both the storage and everyday usage of PYUSD, positioning it as a practical payment method rather than merely a trading instrument. “We want to make PYUSD part of the everyday digital wallet experience, not just something people use for trading or speculation,” said Jose Fernandez da Ponte, PayPal’s Senior Vice President of Blockchain, Crypto, and Digital Currencies. He also emphasized that the company is working closely with regulators to ensure compliance in all PYUSD operations. Transparency and regulatory clarity, he noted, are key to the success of such initiatives in an environment of growing scrutiny around stablecoins.

Previously, PayPal users in the U.S. were granted the ability to send cross-border dollar transfers with zero fees using PYUSD. This functionality was also extended to users in Africa and the APAC region.