PayPal Holdings has announced it will launch a new loyalty programme this summer, allowing US users to earn annual rewards of 3.7% on their holdings of PayPal USD (PYUSD).
The initiative will be available via both PayPal and Venmo wallets and forms part of the fintech giant’s strategy to accelerate the adoption of its proprietary stablecoin. Rewards will be issued in PYUSD and credited monthly, with daily accruals, directly into the user’s Cryptocurrencies Hub.
In a statement issued Tuesday, PayPal President and Chief Executive Alex Chriss said: “At PayPal, we believe stablecoins have the power to reshape the future of commerce as the foundation for the next generation of payments. Combining this innovative technology with our expansive global network allows us to help all users thrive in the world economy.”
The programme enables users not only to earn but also to immediately utilise their rewards for a variety of purposes. Holders can spend PYUSD with millions of merchants via PayPal Checkout, transfer funds peer-to-peer across the PayPal and Venmo networks, fund international remittances through Xoom with no transaction fees, or exchange PYUSD back into US dollars on a one-to-one basis.
Additionally, users can convert their holdings into other cryptocurrencies or transfer them onchain to Ethereum and Solana wallets.
Participation in the scheme is optional, with users able to opt in or out at any time. Redemption of PYUSD for fiat currency will remain straightforward within PayPal or Venmo accounts, the company confirmed.
In a bid to boost widespread adoption of PayPal’s PYUSD stablecoin, Coinbase announced on 24 April that it would remove all associated fees when handling the digital currency. The move follows an expanded partnership between PayPal and the cryptocurrency exchange, committing to zero fees on USD-to-PYUSD conversions for both retail and institutional customers.
Coinbase will leverage its blockchain capabilities to broaden support for stablecoins like PYUSD among PayPal’s extensive merchant base, highlighting the benefits of faster and more convenient transaction settlements. The two companies also revealed that they are collaborating on developing new on-chain use cases that integrate PYUSD across various environments.
Brian Armstrong, Chief Executive of Coinbase, said: “We’re excited to be partnering with PayPal. Their more than 430 million consumer and merchant accounts offer an unprecedented opportunity to increase stablecoin adoption globally.”
PayPal launched PYUSD last year, backed 1:1 by US dollar deposits, short-term Treasuries, and similar cash equivalents, as part of a wider push into digital assets. The stablecoin is positioned to support cross-border settlements, B2B payments, and future services such as payouts and bill payments.
PayPal’s latest initiatives underline the growing convergence of traditional financial services and digital assets, as major institutions continue to stake claims in the evolving stablecoin market.
