Stablecoin Issuers Eye New Ways to Reward Users in Booming Market

Stablecoin issuers are increasingly offering yield to users in a bid to compete in the growing market, while PayPal focuses on building a payments-focused stablecoin.

Stablecoins are looking to attract users by offering a share of the profits they generate. This new strategy comes amid a surge in the stablecoin market, estimated to be worth trillions of dollars.

Traditionally, stablecoin issuers profited from the interest earned on assets backing their tokens, but didn’t share any of that with users. Now, with competition heating up, companies are looking at ways to distribute those profits.

One approach is offering yield on stablecoin holdings. This has the potential to disrupt the dominance of established players like Tether (USDT) and Circle (USDC) who don’t currently offer such benefits.

However, not all stablecoin issuers are jumping on the yield bandwagon. PayPal, for example, is focusing on building a fast and efficient payment system with its PYUSD token, even if it means sacrificing some yield potential.

The coming years are likely to see a diversification of stablecoin offerings, catering to different user needs – some prioritizing yield, others prioritizing fast and cheap payments.

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