PayPal introduces rewards programme to boost adoption of Stablecoin

SAN JOSE, CALIFORNIA: PayPal Holdings Inc. plans to offer rewards to its users on their holdings of its stablecoin, in a bid to encourage more usage of the digital token in an increasingly competitive market.

Through the programme, which is expected to launch this summer, PayPal and Vemno users in the US will be able to earn 3.7 percent annually on PayPal USD holdings in their wallets, the company said on Wednesday. Users will receive the rewards in PYUSD, which they will be able to exchange for fiat currency, send to other users, find international transfers or utilise for purchases with PayPal Checkout, the company said.

The reward – which will accrue daily and will be paid monthly – are aimed at helping incentivise use of the stablecoin as a form of payment on PayPal’s network, Jose Fernandez Da Ponte, the company’s senior vice president and general manager of blockchain, crypto and digital currencies, said in an interview.

Stablecoins – digital tokens designed to maintain a constant value against an asset like the dollar or euro – have been moving into the mainstream along with other cryptocurrencies like Bitcoin. Their low volatility has made them popular with crypto traders looking to move in and out of positions, or transfer funds between platforms. they are also increasingly seen as a promising way to facilitate faster and cheaper digital payments and cross-border money transfers.

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PayPal became the largest established financial company to launch a stablecoin when it introduced PYUSD in 2023. But with a total market value of around $873 million, the token has not yet made a significant dent in the market that is currently dominated by Tether’s $145 billion USDT. Only six stablecoins have a market value of more than $1 billion, according to CoinGecko.