How much interest can you earn by depositing your USD Coin in a Coinbase Earn account?
What is USD Coin (USDC)?
USD Coin (USDC) is a type of cryptocurrency called a stable coin. USDC is issued by Circle and Coinbase, two leading regulated financial institutions, and is fully backed by reserve assets. The price of 1 USDC is pegged to $1 (US dollar), meaning that each USDC is redeemable 1:1 for US Dollars. USDC is widely considered to be the gold standard in USD-pegged stable coins and is effectively a digital dollar that allows global transactions denominated in USD between crypto-wallets. USD Coin is an Ethereum token powered by the Ethereum network, meaning that it can be stored in any Ethereum-based wallet.
How does it work?
Once you deposit your USDC at Coinbase, they lend it to verified borrowers and it begins to earn interest. There are no fees or withdrawal limits, and your USDC can be sold or sent from your account at any time. On Coinbase’s website, they claim that your principal is guaranteed by Coinbase, although it is not FDIC or SIPC insured like a true savings account at a bank. The fact that Coinbase is an NASDAQ-listed company with a market cap around $50 billion, so the fact that they are guaranteeing your principal provides the highest level of confidence of any of the crypto-lending platforms.
Coinbase is the largest cryptocurrency exchange in the United States by trading volume. It is ranked as the #3 crypto exchange in the world by CoinMarketCap.comon the basis of traffic, liquidity, trading volumes, and confidence in the legitimacy of trading volumes reported. Coinbase is publicly traded on the NASDAQ under the ticker $COIN and has a market cap of around $50 billion at the time of writing.
Get started with Coinbase
Signing up for a Coinbase account is easy and can be done in a few minutes. Use the sign-up link above to earn up to $200 in free crypto once you create a Coinbase account and deposit funds.
Coinbase Reputation and Risks
It’s important to do your own research and due diligence before depositing your funds with any financial institution. A key thing to understand is that unlike traditional banks, your deposits at Coinbase are not FDIC or SIPC insured like a traditional savings account at a bank. However, with the USDC interest earning product, Coinbase claims to privately guarantee your principal against loss due to creditors being unable to repay the loan. Combined with the fact that Coinbase is the largest crypto institution in the United States, this provides the industry’s highest level of confidence in the safety and security of your funds.