The San Francisco-based cryptocurrency exchange Coinbase has cut interest rates that consumers can earn on the stable USDC coin by 88%.
The reduction is from 1.25% annual profits to 0.15%, according to an email shared by the company.
As reported, Coinbase began giving its US-compliant customers a 1.25% annual gain on stablecoin in October 2019. At the time, the company said the move was in line with its mission to “make cryptocurrency.” accessible to all. “
The 88% drop in profits puts Coinbase in line with major US banks that offer similar savings rates. Large banks such as Bank of America, HSBC, Chase and Wells Fargo offer savings accounts without minimum balance requirements, offering returns of up to 0.01%, while newer companies, according to TheBalance, offer accounts without minimum requirements offering up to 1.5 % per year.
The average rate, according to the same source, is 0.09%, which means that Coinbase’s remuneration rate for USDC holders is still above the average offered. The USDC coin itself was launched in September 2018 as a product of CENTER, a joint open source technology project built by Coinbase and Circle.
Since then, the stablecoin has become the second largest cryptocurrency space, behind the Tether token – USDT. In March this year, during the collapse of cryptocurrencies, the supply of the stable coin of Tether exceeded 6 billion, while the USDC exceeded 600 million.
At the time of writing, there are more than $ 9.19 billion USDT in circulation, while there are now $ 736 million USDC tokens in circulation. It is worth noting that consumers can earn interest on USDC and USDT tokens on other platforms, including decentralized financial protocols.