The announced yields represent the exchange increasing interest for USDC holders by more than 2,500% since it was lowered significantly last June. Major cryptocurrency exchange Coinbase has announced users will be able to earn 4% interest on USD Coin through a product the company compared to an alternative to a fiat savings account.
In a Tuesday blog post, Coinbase said its users could earn 4% annual percentage yield, or APY, by lending out their holdings for the U.S. dollar-pegged stablecoin USD Coin (USDC). The crypto exchange seemed to be targeting banks with the offering, claiming it has a better return than a typical savings account in the United States.
However, Coinbase said the loaned USDC is not protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation — unlike typical savings accounts in the U.S. — nor is the exchange offering a crypto interest account that provides “attractive rates on customers’ assets.” While most savings accounts in the United States provide returns of less than 1% on the dollar, many other crypto platforms provide an interest rate of roughly 8% for lending U.S. dollar-pegged stablecoins.
“While the high interest rates are appealing, they can present varying levels of risk,” claimed Coinbase. “You may find that your assets are loaned to unidentified third parties and subject to their credit risk, which could result in a total loss of your crypto holdings.”
The exchange originally offered 1.25% yields on USDC from October 2019 to June 2020, when it unexpectedly announced rewards for users holding the stablecoin would drop to 0.15%. The 4% yields represent Coinbase potentially increasing interest for USDC holders by more than 2,500%. At the time of publication, USDC is the 8th largest cryptocurrency, with a market capitalization of more than $25 billion. Tether (USDT) remains the most popular stablecoin on the crypto market, coming in 3rd with a $62.5 billion market cap.
# | Crypto | Prediction | Accuracy | CVIX | Price | 24h | 7d | Market Cap | 7d price change | |
1 | BTC | Bitcoin predictions | 88% | 13 | $61 211.90 | 0.48% | -4.05% | $1 205 717 528 584 | ||
---|---|---|---|---|---|---|---|---|---|---|
2 | ETH | Ethereum predictions | 88% | 18 | $2 928.43 | 0.30% | -6.57% | $351 736 999 818 | ||
3 | USDT | Tether predictions | 90.8% | 1 | $0.999613 | -0.03% | -0.05% | $110 797 125 569 | ||
4 | BNB | Binance Coin predictions | 85.6% | 15 | $595.55 | 0.26% | 0.86% | $87 894 822 449 | ||
5 | SOL | Solana predictions | 83.2% | 29 | $143.98 | -1.24% | -1.01% | $64 580 859 813 | ||
6 | USDC | USD Coin predictions | 95.2% | 1 | $0.999958 | -0.01% | -0.01% | $33 126 978 269 | ||
7 | XRP | XRP predictions | 88.4% | 13 | $0.500175 | -1.34% | -5.43% | $27 689 270 755 | ||
8 | TON | Toncoin predictions | 76% | 50 | $6.97 | 1.87% | 18.33% | $24 223 749 807 | ||
9 | DOGE | Dogecoin predictions | 78.8% | 32 | $0.141037 | -1.87% | -12.02% | $20 346 584 433 | ||
10 | ADA | Cardano predictions | 84.8% | 16 | $0.436745 | -0.57% | -5.00% | $15 576 255 047 | ||
11 | SHIB | SHIBA INU predictions | 77.6% | 44 | $0.000022 | -1.06% | -9.42% | $13 139 852 629 | ||
12 | AVAX | Avalanche predictions | 79.6% | 31 | $33.25 | -1.04% | -10.89% | $12 685 819 177 | ||
13 | TRX | TRON predictions | 78.8% | 31 | $0.126903 | 0.14% | 5.03% | $11 101 583 607 | ||
14 | WTRX | Wrapped TRON predictions | 81.6% | 31 | $0.126614 | 0.10% | 4.46% | $11 076 263 868 | ||
15 | STETH | Lido stETH predictions | 92.8% | 1 | $2 941.39 | -0.40% | -3.32% | $10 258 752 564 |
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