Ethena launches payments app with yield and cashback as ENA surges 8%

Ethena Labs launched the beta version of Ethena Pay on Tuesday (1st), a payments app built on the Avalanche blockchain that combines a digital dollar balance, transfers, a card and rewards. The announcement had a positive market impact: the ENA token was up around 7.8%, trading near US$0.16 after hitting an intraday high of US$0.166, one of the biggest gains of the day among the top 100 cryptocurrencies.

The new app marks Ethena's entry into territory closer to digital banking. The company is known for USDe, its "synthetic dollar", a stablecoin that seeks to maintain parity with the dollar using a combination of reserve assets and derivatives positions, rather than the traditional model of cash and government bond backing used by stablecoins such as USDT and USDC.

According to Ethena, the app will allow users to hold a balance in USDe, receive fiat currency via international banking details such as IBAN, or receive crypto directly into their wallet. In both cases, funds arrive as USDe. It will also be possible to send money to external bank accounts, settled in the recipient's local currency.

Guy Young, founder of Ethena, told The Block that Ethena Pay is the first "neobank" app vertically integrated with a stablecoin issuer's own product, rather than relying on USDC or USDT. He argues that current financial services remain fragmented between fiat and crypto ecosystems, and that the goal is to bring crypto into everyday financial activity.

The app launched initially in beta in 48 countries, including Brazil, Mexico, South Africa, Kenya, the Philippines, Singapore, Japan, the United Arab Emirates and Australia. The United States and the European Union were left out of this first stage, but Ethena expects to include these markets, as well as Canada, Taiwan and South Korea, during the testing phase, depending on local regulatory requirements.

Yield, cashback and a bet on payments

Ethena Pay offers three tiers. The Standard tier is free. Pro can be unlocked by locking US$2,000 worth of ENA tokens or referring 10 users. VIP requires locking US$10,000 worth of ENA or referring 50 users.

Standard users will be able to earn annual yield of 5% on balances of up to US$5,000. On the Pro and VIP tiers, yield rises to 6%, with limits of US$15,000 and US$50,000 respectively. Young said the USDe rate funds the yield on the savings product, but did not detail the source used to fund the rest of the rewards.

The app will also feature the Ethena Pay Card, offering cashback of 4% for Standard users, 4.5% for Pro and 5% for VIP, paid in AVAX, Avalanche's token. Pro and VIP customers will also be able to receive additional cashback of up to 5% and 10% respectively at selected brands, including Uber, Spotify and Claude.

In addition, Ethena promises "instant" global transfers by username or tag, with no transfer fee. Sending and receiving via bank transfer in dollars, euros and pounds will also be free, while other bank transfers will carry fees of between 0.05% and 0.1%.

The choice of Avalanche as the exclusive network reinforces the blockchain's attempt to position itself as infrastructure for financial products aimed at businesses and consumers. Young said Ethena and Avalanche are aligned on the idea of building "invisible" infrastructure for financial services. Avalanche will handle the movement, transfers, payments and settlement for the product.

The launch broadens Ethena's strategy beyond the original USDe business, which today has around US$4 billion in circulation, down from a peak of roughly US$15 billion in September 2025. The company also recently announced changes to ENA token economics and plans to use equity perpetuals as a new source of yield for USDe.

The expansion comes, however, amid regulatory scrutiny. In June 2025, Germany's financial regulator, BaFin, ordered Ethena GmbH to wind down its USDe business after the company withdrew its application for authorisation under the European Union's crypto rules. Ethena said details on Ethena Pay's licences and regulatory approvals will be disclosed in public documentation this week.

In the short term, ENA's positive reaction shows that investors have welcomed the launch as an attempt to turn USDe into a product closer to everyday use. The challenge will be to prove that yield, cashback and payments integration can attract users beyond the crypto audience, without adding regulatory risk in larger markets such as the United States and the European Union.

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