PayPal to Push PYUSD Stablecoin Usage with 3.7% Yield Earnings

The stablecoin market, valued at $237 billion in April 2025 according to CoinGecko, is a cornerstone of digital finance, offering stability in a volatile crypto landscape.

PayPal, a global payments leader, is seizing this opportunity with a bold initiative: a 3.7% annual yield on its PayPal USD (PYUSD) stablecoin.

Announced on April 23, 2025, by PayPal, this program aims to boost PYUSD’s adoption, positioning it as a mainstream tool for payments and savings. With over 400 million active users, PayPal’s move could redefine how stablecoins are used.

Launched in August 2023, PYUSD is a US dollar-pegged stablecoin issued by Paxos Trust Company for PayPal. It maintains a 1:1 value with the dollar, backed by cash deposits, short-term US Treasuries, and similar assets, as detailed on PayPal’s help page.

Initially an ERC-20 token on Ethereum, PYUSD expanded to Solana, enhancing its transaction speed and reach. Its market cap reached $1 billion in summer 2024 but stands at $873.3 million in April 2025, per CoinMarketCap. This is modest compared to Tether (USDT) at $145.3 billion and USD Coin (USDC) at $58 billion.

The PayPal Stablecoin Yield Program

PayPal’s yield program, set to launch in summer 2025, offers a 3.7% annual return on PYUSD balances. A PayPal representative told Bloomberg that the goal is to encourage more usage.

The yield accrues daily and is paid monthly in PYUSD, likely derived from interest on the stablecoin’s backing assets, such as US Treasuries.

Users can exchange PYUSD for fiat, spend it, or send it to others, making it a flexible financial tool. Unlike most stablecoins, which rely on third-party platforms for yield, PYUSD’s built-in return simplifies the process for users.

The yield feature introduces regulatory complexities, triggering stricter oversight. According to the SEC’s guidance, non-yield stablecoins are not securities, but yield-bearing ones remain ambiguous.

PayPal is deepening its crypto footprint. In April 2025, it added Chainlink (LINK) and Solana (SOL) to its platform, allowing US users to buy, sell, and transfer these tokens. PYUSD is integrated into Venmo and Xoom for cross-border payments.

PayPal’s yield program could reshape the stablecoin landscape. The 3.7% yield is competitive, especially when traditional savings accounts offer lower returns.

This could attract PayPal’s vast user base, many new to crypto, boosting PYUSD’s adoption. The program aligns with a growing trend of yield-bearing stablecoins, with their market cap reaching $13 billion, or 6% of the total stablecoin market.

Stablecoin Growth Enhances Financial Integration

Stablecoins have become a vital part of today’s financial world. Their value stays steady because they’re usually tied to the dollar, making them a go-to option for handling payments, managing cash flow, and shielding against market swings.

As blockchain technology blends with traditional banking, stablecoins are playing an even bigger roleas a connection between these two systems. They help link the fast-moving world of cryptocurrency with the established structure of mainstream finance.

The numbers back this up: stablecoin use is booming. Over the past year, the number of active wallets has surged by 53%, and the total amount of stablecoins in circulation has risen by 63%. This rapid growth highlights their growing importance in both crypto and conventional financial landscapes.

As reported by The Coin Republic, Andreessen Horowitz, a venture capital firm, recently praised stablecoins for their ability to handle international payments swiftly and inexpensively.

The firm likened them to WhatsApp, which made global calling effortless and cost-effective, to highlight their efficiency. This practical application reveals how stablecoins offer value far beyond just cryptocurrency trading.