Business & Finance

Coinbase to Offer Saving Account Privileges by Offering Interest on Holding USDC

Coinbase is offering 1.25% interest for merely holding USD Coins (USDCs). The “reward” system is applicable for US customers, who will start earning 1.25% annual percentage yield (APY) for every USDC they’d be holding. The more a person holds, the more they would be earning, that too without any additional costs or fees. The percentage rate of the reward would be the same regardless of the account balance. So, even a holder of USDC would be eligible for the scheme.

Globally people are already familiar with the concept of saving accounts, where banks offer an amount of interest as a reward for holding money in the account. The concept is similar, but instead, the interest rate that Coinbase is rewarding is much higher than what conventional banks offer. This might be a huge step for crypto, as the biggest exchange has opened opportunities for earning apart from trading. Choosing a stable coin for the aforementioned job might be an actual step for disrupting the banking systems, and bringing in more use cases from centralized systems to decentralized can be a seed for adoption in crypto. Without fear of volatility and losses in valuations, people can safely invest in such stablecoins in Coinbase now with a promised stable earning monthly. Happy with the step ahead for crypto Coinbase director of product Max Branzburg was hopeful that there would be more projects like these in the future where customers would be rewarded, making Coinbase a medium for crypto adoption. He stated:

We see this as the beginning of long-term investment in generating rewards for customers. We’ll continue to explore additional ways to bring even more rewards to our customers

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Apart from offering the facilities, a conventional bank provides, USDC holders would also be able to enjoy crypto benefits, such as decentralization, low transfer costs (free in the case of USDC), and the cherry on the top is 15 times the interest rate. Apart from the benefits, the interest is more like an award system, as Coinbase would not be lending or managing cryptos for anyone. So, earning and trades would be safe. Coinbase’s blog post states:

Coinbase’s mission to make crypto accessible to everyone, USDC Rewards will enable more customers to take advantage of stablecoin rewards, simply and easily.

USDC currently lies at number 23 on the coin market cap, making it one of the most reliable top cryptocurrencies. The creator of USDC, CENTER consortium, which was co-founded by Coinbase and Circle, recently announced that they have issued over one billion USD. With the news of the issuance and Coinbase’s reward system, the coin is likely to climb a few places in the coin market cap by surges in trading volumes. Coinbase’s blog also states that it’s free to buy USDCs with a bank account, and USDC holders on Coinbase have the freedom to convert them to USDs or to any cryptocurrency that they desire. The USDC, for now, however, is initially an ERC-20 token, and according to its parent company Center, there would be an ecosystem with more fiat currency tokens soon. The currency is totally open source and transparent, the framework of which “allows fiat to interact with smart contracts, giving developers a viable way to use real-world currencies in blockchain applications,” as advertised by CENTER. They see a future where goods are tokenized, and fiat and blockchain would have to go hand in hand, which is why a USD backed stable coin was developed. CENTRE also assures that in order to maintain a 1:1 peg with the USD, full reserves of equivalent fiat currency are maintained so that there isn’t any deviation in the valuation, hence removing the factor of volatility.

READ ALSO: It’s 2019, Do You Know Where Your Crypto Are?

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Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: shehryar@blockpublisher.com or contact the editor at editor.news@blockpublisher.com

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