Coinbase has just announced on its official blog the launch of USDC Rewards, a program that allows customers in the United States to earn passive interest simply by keeping USDC within their wallets.
In the wake of the Binance initiative, Coinbase is also moving in this direction. A few weeks ago, CZ, the CEO of Binance, announced a new program called Binance Lending, offering customers who use the platform the opportunity to achieve a passive return regardless of market movements.
Paul Katsen, the product manager at Coinbase, said:
“We’re trying to build more ways for customers to grow their wealth on Coinbase. One of the things we know is a bad customer experience is having to move your money back and forth from Coinbase to a bank account [to] earn a little bit of interest in the bank account. We’re trying to bring some of these experiences together but make them crypto-first and on Coinbase.”
Coinbase has indicated that it takes several days to transfer money outside the platform, which is normal. However, with this new program, it will be possible to avoid this by holding USD Coin (USDC) on the account.
The substantial difference between Binance Lending and USDC Rewards is that USDC will not be lent and will remain in the possession of customers at all times, it will not be sold to third parties, nor will Coinbase itself use those funds in any other way. Regardless of the current balance, the interest rate is the same, 1.25%, and it will be distributed monthly.
For the time being, this service is only available to the United States with the exception of the state of New York. Since September 2018, Circle has issued more than $1 billion in USDC and Coinbase has indicated that this is only a first step in this direction.
Max Branzburg of Coinbase said:
“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.”
The exchange also pointed out that several cryptocurrencies will be taken into account, as well as numerous geographical areas.