As of July 18, 2025, PayPal’s direct interest offerings are primarily focused on its PYUSD stablecoin.
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PayPal and Cryptocurrency
PayPal allows users to buy, hold, and sell cryptocurrencies directly through their accounts. However, interest is not directly paid on Ethereum (ETH) holdings within PayPal.
PYUSD Stablecoin Rewards
PayPal is rolling out a rewards initiative for US users holding its PYUSD stablecoin, offering up to 3.7% annual interest. This yield is supported by the backing of short-dated U.S. Treasuries.
Buying Ethereum with PayPal
While you can’t earn interest on ETH within PayPal, you can use PayPal to purchase ETH through various methods:
- Directly on PayPal: If you’re in the United States, you can buy ETH directly on the PayPal platform.
- Cryptocurrency Exchanges: Exchanges like Kraken, Coinbase, and CEX.IO accept PayPal as a payment method for crypto transactions.
- P2P Platforms: You can use peer-to-peer (P2P) platforms to find individual sellers who accept PayPal payments for ETH.
Using PayPal for crypto transactions offers quick and efficient processing, crucial in the fast-paced crypto market.
Alternatives for Earning Interest on Ethereum
While PayPal doesn’t directly offer interest on Ethereum, there are other avenues to explore if you’re looking to earn a yield on your ETH holdings:
- Decentralized Finance (DeFi) Platforms: DeFi platforms like Aave, Compound, and MakerDAO allow you to lend or stake your ETH to earn interest. These platforms often offer higher yields than traditional financial institutions, but also come with increased risks.
- Centralized Exchanges (CEXs) with Staking Programs: Some centralized exchanges, such as Binance and Kraken, offer staking programs where you can lock up your ETH to earn rewards. These programs typically offer lower yields than DeFi platforms but may be more convenient for some users.
- Liquid Staking Derivatives (LSDs): Platforms like Lido Finance and Rocket Pool allow you to stake your ETH and receive a liquid staking derivative (e.g., stETH) in return. This derivative can then be used in other DeFi protocols to earn additional yield, while still earning staking rewards on your ETH.
Considerations When Choosing an Interest-Earning Option
Before choosing an option to earn interest on your Ethereum, consider the following factors:
- Risk Tolerance: DeFi platforms and less reputable CEXs carry higher risks of smart contract bugs, hacks, and impermanent loss.
- Yield: Compare the yields offered by different platforms and programs. Higher yields often come with higher risks.
- Lock-up Period: Some platforms require you to lock up your ETH for a specific period, while others allow you to withdraw it at any time.
- Platform Security: Research the security measures implemented by the platform or exchange.
- Tax Implications: Understand the tax implications of earning interest on your ETH.
While PayPal doesn’t currently offer interest directly on Ethereum, it facilitates the purchase and sale of ETH. For those seeking to earn interest on their ETH holdings, exploring DeFi platforms, CEX staking programs, and LSDs provides alternative avenues. Carefully consider the risks and rewards before choosing the best option for your individual circumstances.
