Coinbase Debuts Savings Product With 4% APY on USDC Deposits

The crypto exchange is touting far higher yields than what traditional savings accounts can offer.

AccessTimeIconJun 29, 2021 at 2:30 p.m. UTC
Updated Sep 29, 2023 at 11:57 a.m. UTC
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Coinbase is rolling out a crypto savings account that lets you earn 4% annual percentage yield (APY) by lending out your USDC.

The account isn’t FDIC- or SIPC-insured and functions much like other products at crypto lenders and other exchanges that regularly offer yields around 8%. The reason why Coinbase is offering a comparatively lower yield is because it doesn’t lend to “unidentified third parties,” said Thorsten Jaeckel, senior product manager at Coinbase. 

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  • Coinbase, which administers the USDC stablecoin in partnership with Circle through the CENTRE Consortium, appears to be aiming squarely for banks with its new product, touting rates “more than 50x the national average of a traditional savings account.”

    The account is geared towards retail users and the yield is created by Coinbase lending out the USDC to “verified borrowers,” Jaeckel told CoinDesk via email.

    It’s the second USDC savings product advertising 4% APY in as many days. On Monday, Compound Labs, the maker of the major Ethereum money market of the same name, announced the creation of Compound Treasury. That USDC-powered vehicle is aimed at fintechs and neobanks.

    Pre-enrollment for the consumer-oriented Coinbase product is now open for eligible customers in the U.S.; users in Hawaii and New York are not eligible.

    The USDC product arrives less than a year after Coinbase rolled out its bitcoin lending product, which has been equally conservative. Coinbase capped credit lines at $20,000 per customer and offered an interest rate of 8% for BTC-backed loans with terms that are of a year or shorter.

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