PayPal is set to offer a 3.7% annual return on its PayPal USD (PYUSD) stablecoin to U.S. users, making the token more appealing and standing out among the competition.
PayPal is set to offer a 3.7% annual return on its ‘PayPal USD (PYUSD)’ stablecoin to U.S. users, with yields accrued daily and paid monthly.
PYUSD stands for 'Pay US Dollar'.
It is a cryptocurrency pegged to the value of the United States dollar (USD).
The PYUSD token is designed to maintain a stable value relative to the 'United States dollar' (USD), making it an attractive option for investors seeking a low-volatility asset.
PYUSD operates on blockchain technology, allowing for secure and transparent transactions.
Its primary purpose is to provide a digital equivalent of fiat currency, offering users a convenient way to store, send, and receive US dollars digitally.
The program aims to increase adoption of PYUSD by making the token more appealing and standing out among the competition. This move is part of PayPal’s broader push into cryptocurrency, as the company seeks to build new payment rails through the space.
The program will allow users to earn rewards while keeping their stablecoins in PayPal and Venmo wallets. The stablecoin can be spent via PayPal Checkout, transferred to other users, or converted to traditional dollars. Users will not need to leave their wallets to participate in the program.
This move is part of PayPal’s ongoing cryptocurrency push. Earlier this month, the firm added ‘chainlink (LINK)’ and ‘solana (SOL)’ to its growing list of supported cryptocurrencies. The company has stated that stablecoins offer a chance to reshape the economics of the payment landscape.
A stablecoin is a type of cryptocurrency that maintains a stable value relative to a fiat currency, such as the US dollar.
These coins are designed to reduce price volatility and provide a more stable store of value compared to other cryptocurrencies like Bitcoin.
Stablecoins can be pegged to a specific asset or basket of assets and are often used for trading, lending, or settling transactions.
They typically use collateralization methods, such as holding reserves of the underlying asset, to maintain their stability.
Despite PayPal’s brand recognition, PYUSD’s market share remains small — about $868 million — compared to market leader ‘Tether‘s $143 billion USDT,’ according to RWA.xyz data. However, this move aims to increase PYUSD’s presence in the stablecoin market.
‘We are halfway in a 10-year journey,’ said Jose Fernandez da Ponte, PayPal’s head of blockchain and digital currencies. The aim is to build a new set of payment rails that reduce costs and improve speed.
Payment rails refer to the underlying infrastructure that enables secure and efficient transactions between businesses, banks, and customers.
They provide a framework for processing payments, managing risk, and ensuring compliance with regulatory requirements.
Key features of payment rails include real-time settlement, reduced transaction costs, and improved security through encryption and tokenization.
