Coinbase is now providing as much as a 5% rate of interest on any USDC held on the trade, up from the 4% launched earlier within the yr.
Primarily based on historic information from the corporate’s web site, the rise marks a formidable 150% bump from the two% reward fee on USDC that was lively as of June 9.
USDC protected from SEC scrutiny
The two% reward fee was elevated to 4% on June 15 after the SEC mentioned in a submitting in its case in opposition to Coinbase that it didn’t contemplate USDC — or any stablecoin —to be unregistered securities choices. Thus any rewards supplied for holding stablecoins doesn’t violate present regulation.
Nonetheless, staking rewards for cryptocurrencies had been deemed unregistered securities choices by the watchdog, which additionally blocked Coinbase’s deliberate Lend program in 2021 because of regulatory issues.
The present USDC reward mechanism is funded instantly by Coinbase and has evaded such issues because of this divergence from different controversial applications just like the Lend program — which supposed to mortgage out customers’ USDC to generate rewards.
USDC vs USDT
Coinbase’s aggressive increments within the USDC reward fee spotlight its intention to push for extra stablecoin adoption, which has lagged considerably behind its rival Tether’s USDT by way of market share prior to now 12 months.
Circle CEO, Jeremy Allaire, cited regulatory crackdowns within the U.S. as a major think about USDC’s market capitalization dip. The stablecoin additionally confronted challenges when $3.3 billion of its reserves turned trapped at Silicon Valley Financial institution through the U.S. banking disaster, inflicting the stablecoin to detach from its greenback peg momentarily.
USDC’s market share hit a two-year low on the finish of July — falling to 21.91% from a excessive of 33.27% earlier than the disaster. In the meantime, USDT climbed from 49.48% to 68.87% market share throughout the identical interval.
The stablecoin has struggled to regain the share it misplaced to USDT because the begin of the yr however has begun to indicate indicators of momentum in current weeks.
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