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.
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.
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