PayPal and Anchorage Digital Introduce rewards Program for PYUSD Stablecoin
PayPal has collaborated with Anchorage Digital to roll out a rewards program for customers holding PayPal’s USD stablecoin (PYUSD). This unique initiative targets clients utilizing Anchorage’s services or the Porto institutional self-custody wallet to store their PYUSD holdings securely.
According to a statement by the crypto bank, “PYUSD remains fully accessible and segregated in participants’ accounts on-chain for quick deployment.” Importantly, this rewards program offers clients an opportunity to earn rewards without the need for rehypothecation, staking, or lending.
PYUSD is Backed 1:1 by US Dollars
First introduced by PayPal in 2023, PYUSD is an ERC-20 token on the ethereum blockchain backed 1:1 by US dollars, issued by Paxos Trust Company, a regulated crypto custodian in the US. This stablecoin aims to compete with other leading dollar-backed stablecoins like the USD coin from Circle Internet Financial.
One notable feature of PYUSD is its seamless integration capability with various external developers, wallets, and web3 applications, enhancing its utility and attractiveness in the digital economy. Stablecoins like PYUSD are gaining popularity in global financial transactions due to their programmability, ease of transfer, and self-custody option, making them particularly beneficial for global remittances.
The rise of regulated digital asset custodians in the US is evident, with companies like Anchorage Digital taking the lead. Apart from launching this rewards program, Anchorage also introduced Porto earlier this year, a self-custody solution tailored for institutional clients such as venture funds and sovereign wealth funds.
This sector’s growth is further evidenced by institutions like Coinbase offering around a 5.2% annual yield on USDC holdings through its institutional custody arm. Recently, Fireblocks also received regulatory approval from New York to custody assets for US clients.
Nathan McCauley, CEO of Anchorage Digital, emphasized, “crypto innovators aim to leverage their treasury cash securely and conveniently without compromising on security or accessibility.”
PayPal’s Stablecoin Supply on Solana Surpasses ethereum
Recent data shows that PayPal’s PYUSD supply on the Solana blockchain has exceeded that on ethereum. The growth of PYUSD on Solana has been bolstered by its integration into decentralized exchanges like Jupiter and Orca, where PYUSD has been added to liquidity pools.
This expansion has solidified PYUSD’s presence on Solana alongside leading stablecoins such as USDC and USDT. PayPal’s PYUSD stablecoin on the Solana blockchain features “confidential transfers” to enhance user privacy while ensuring transparency for regulatory purposes.
Additionally, Solana‘s token extension standard, aligned with the SPL token standard, offers various advantages for PYUSD, including reduced development and testing efforts, enterprise-ready capabilities for seamless integration, and enhanced flexibility.
Despite the stablecoin market’s substantial valuation of over $140 billion, it remains unregulated. Recently, Senators Cynthia Lummis and Kirsten Gillibrand proposed a new bill aimed at regulating stablecoins, which would require payment stablecoin issuers to adhere to reserve and operational requirements, including establishing subsidiaries dedicated to issuing stablecoins.
