U.S.-based cryptocurrency exchange Coinbase now allows its users to earn interest on their USD Coin (USDC) holdings, the company announced in a blog post on 2 October.
According to the publication, on Wednesday Coinbase launched its USDC Rewards program, which allows all its eligible U.S. customers to earn a 1.25% annual percentage yield (APY) reward for every USDC they hold on the exchange.
As with many things crypto, New York state customers will have to wait before they can benefit from this program, as it will not be available for them initially.
Paul Katsen, Coinbase’s product manager, 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.”
The statement further stressed that there are no additional costs or fees associated with the rewards program, and that its users automatically begin to accumulate rewards for every USD Coin they have in their Coinbase account.
The rewards will be distributed on a monthly basis, with users being able to track them in real-time, and use them to buy any other cryptocurrency listed on the exchange.
In its announcement, Coinbase said that USDC is not a legal tender, and that the exchange is not a depository institution.
It also added that the USDC wallet is not insured by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC).
The USD Coin was introduced in September 2018 by the CENTRE Consortium, which is a joint venture between Coinbase and Circle.
Almost one year later, in early August, CENTRE announced that it has issued over a billion USDC.