20 July 2026
Coinbase to Pay Users 4 percent APY on USDC Holdings.
Popular US-based exchange Coinbase launches a crypto savings program that lets users earn 4% annual percentage yield (APY) by lending out their USDC.
Coinbase, which administers the USDC stablecoin in partnership with Circle through the CENTRE Consortium, seems to be targeting banks with its new product, claiming it has a better return than a typical savings account in the U.S.
However, the company clarified that the loaned USDC would not be protected by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC), unlike typical savings accounts in the U.S. The reason why Coinbase is offering a comparatively lower yield is that it doesn’t lend to “unidentified third parties,” said senior product manager at Coinbase.
“While the high interest rates are appealing, they can present varying levels of risk,” asserted Coinbase. “You may find that your assets are loaned to unidentified third parties and subject to their credit risk, which could result in a total loss of your crypto holdings.”
The USDC product comes less than a year after Coinbase launched 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. The 4% yields represent the exchange increasing interest for USDC holders by more than 2,500% since it lowered significantly last June.
At the time of publishing, USDC is the 8th largest cryptocurrency, with a market capitalization of more than $25 billion. However, Tether (USDT) remains the most popular stablecoin in the 3rd position with a $62.5 billion market cap.
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