PayPal and Anchorage Digital Launch rewards Program for PYUSD Stablecoin
PayPal has teamed up with Anchorage Digital to roll out an enticing rewards program catering to clients holding PayPal’s USD stablecoin (PYUSD). This innovative initiative targets clients utilizing Anchorage’s services or the Porto institutional self-custody wallet to safeguard their PYUSD holdings.
The crypto bank emphasized that PYUSD remains fully accessible and segregated in participants' accounts on-chain for swift deployment. The rewards program offers a unique opportunity to earn rewards without the complexities of rehypothecation, staking, or lending.
PYUSD is Backed 1:1 by US Dollars
In 2023, PayPal introduced PYUSD as an ERC-20 token on the ethereum blockchain. Backed 1:1 by US dollars and issued by Paxos Trust Company, a regulated crypto custodian in the US, the stablecoin aims to compete with other major dollar-backed stablecoins like the USD coin from Circle Internet Financial.
One of the standout features of PYUSD is its seamless integration capability with a wide range of external developers, wallets, and web3 applications, enhancing its versatility and appeal in the digital economy. With the increasing preference for stablecoins in global financial transactions due to their programmability, ease of transfer, and option for self-custody, this development is poised to benefit global remittances.
The US is witnessing the rise of regulated digital asset custodians, exemplified by Anchorage Digital's leading role in launching the rewards program and introducing Porto earlier this year. Porto serves as a self-custody solution tailored for institutional clients such as venture funds and sovereign wealth funds.
The growth in this sector is mirrored by other institutions like Coinbase, offering an approximate 5.2% annual yield on USDC holdings through its institutional custody arm. Similarly, Fireblocks recently received approval from New York's financial regulator to custody assets for US clients.
Nathan McCauley, CEO of Anchorage Digital, emphasized the importance of balancing treasury cash leverage with security and accessibility for crypto innovators.
PayPal’s Stablecoin Supply on Solana Surpasses ethereum
Notably, PayPal's PYUSD has experienced a surge in its supply on the Solana blockchain, surpassing its presence on ethereum. This growth has been fueled by PYUSD's integration into decentralized exchanges like Jupiter and Orca, where it has been added to liquidity pools.
The expansion has solidified PYUSD's position on Solana alongside leading stablecoins such as USDC and USDT. The stablecoin on Solana features "confidential transfers" to enhance user privacy while ensuring regulatory transparency.
Furthermore, Solana's token extension standard, compliant with the SPL token standard, offers several advantages for PYUSD, including streamlined development and testing efforts, enterprise-ready capabilities, and enhanced flexibility.
Despite the stablecoin market's staggering valuation exceeding $140 billion, it remains largely unregulated. Recently, Senators Cynthia Lummis and Kirsten Gillibrand introduced a new bill aimed at regulating stablecoins. The proposed legislation would subject payment stablecoin issuers to reserve and operational requirements, mandating the establishment of subsidiaries dedicated to issuing stablecoins.
