The largest US cryptocurrency company Coinbase has announced that exchange customers will be charged 1.25% per annum on their deposits in the dollar-linked stablecoin USDC.
Starting today, eligible US customers will earn 1.25% APY rewards on every USD Coin held on Coinbase. Read more here: https://t.co/IqyStL1OPo pic.twitter.com/yhiAiN4tgw
– Coinbase (@coinbase) October 2, 2019
Users can monitor the interest accrual in real time, but the reward will be distributed monthly. There are no restrictions on the withdrawal of coins.
Coinbase believes that customers who have switched from crypto trading to deposit funds on bank deposits at interest will now benefit from leaving them on the exchange in USDC. At the same time, transfers between the bank and the cryptocurrency broker usually take 4-5 days, the exchange emphasized.
Primitive Ventures managing partner Dovi Wang criticized Coinbase’s proposal, noting that given the risks, the percentage of annual return (APY) should be higher than that of banks. She demonstrated banking offers where APY in the range of 1.9-2%.
1.25% APY ?? ??
So I exchange my precious $ USD into USD coin (+1 layer of intermediary risk from the issuer), deposit into Coinbase (+2 layers of intermediary risk)
And will get a lower APY comparing with direct saving with bank account that directly banks with the Fed?
?? https://t.co/5w6FSIjO0Y pic.twitter.com/aiMebMSIk4
– Dovey Wan ? ? (@DoveyWan) October 2, 2019
“So, I change my precious dollars to USDC (+1 level of intermediary risk from the issuer), I make a deposit to Coinbase (+2 level of intermediary risk). And get a lower APY compared to the direct accumulation in the bank account, which is directly connected with the Fed? ”
Issuers of USDC are Bitcoin startup Circle and Coinbase, which last year created the CENTER consortium to promote stablecoin .
Circle and Coinbase previously announced the expansion of the Center consortium to allow other companies to issue USDC.
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