PayPal Holdings Inc. plans to offer rewards to its users on their holdings of its stablecoin, in a bid to encourage more usage of the digital token in an increasingly competitive market.

PayPal is offering a 3.7% annual yield on its PYUSD stablecoin to get more people using it, after falling behind in a space already dominated by other players. The rewards will go live this summer for PayPal and Venmo users in the U.