PayPal Holdings will launch a rewards program this summer that will allow users to earn rewards on holdings of the PayPal USD (PYUSD) stablecoin in their PayPal or Venmo wallets.
The company expects to offer a 3.7% annual rewards rate upon the launch of the program, although it can change the rate at any time, PayPal Holdings said in a Wednesday (April 23) press release.
Users will be able to immediately use the rewards to send to other PayPal or Venmo users, fund international transfers, exchange for fiat, convert to other cryptocurrencies or make purchases at merchants with PayPal Checkout, according to the release.
“Consumers and businesses use PYUSD today for commerce, crypto, peer-to-peer transfers and B2B payments,” PayPal President and CEO Alex Chriss said in the release. “We’re demonstrating our commitment to an innovative, commerce-ready ecosystem by enabling it for the settlement of cross-border transfers, vendor payments and in the future for additional payment use cases like payouts and bill pay.”
PayPal introduced PYUSD in August 2023, saying the U.S. dollar-pegged stablecoin was issued by Paxos Trust Co.; 100% backed by U.S. dollar deposits, short-term U.S. Treasuries and similar cash equivalents; and “designed to contribute to the opportunity stablecoins offer for payments.”
During an investor day held Feb. 25, Michelle Gill, general manager of small business and financial services at PayPal, said the company expects to use the stablecoin to power a new B2B bill pay offering.
“B2B bill pay is tapping into a $2 trillion market,” Gill said. “This is exciting not just for our merchants, but also for PayPal in that it opens up a brand-new network. … They now get to invite their vendors and their suppliers to join the PayPal ecosystem. … By the end of 2025, we hope to power all of this through PYUSD.”
Coinbase Wallet began letting users of its USDC stablecoin earn rewards by holding the stablecoin on-chain in November, saying rewards will be paid out monthly, directly into user wallets. The feature, USDC Rewards, is available in most regions worldwide and was made available to American users in November.
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