PayPal's PYUSD stablecoin has not gained as much market capitalization as its competitors Tether and Circle, prompting a rewards program for accredited investors who hold PYUSD. The program, offered in partnership with Anchorage Digital, raises questions about regulatory uncertainty around stablecoin interest payments. Anchorage Digital insists that the program does not constitute a securities offering nor fall under the jurisdiction of banking regulators, but the regulatory position of stablecoins remains unclear. The PYUSD rewards program will be paid out from a separate Caymans-based subsidiary, and while it lacks traditional guardrails, it may benefit institutional investors seeking to take advantage of the current interest rate environment.

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