Premier cryptocurrency exchange Coinbase has announced that it will offer interest on deposits in stablecoin USD Coin (USDC) for 1.25% APY. This indicates its willingness to encourage more of its large database of users to deposit their holdings in the cryptocurrency token. Transferring the value of the US Dollar which in itself is a significant advantage, the move is aimed at bringing respite to crypto users who always face the volatility which occurs on most of the cryptocurrency tokens.
In a blog post, the cryptocurrency exchange launched its USDC rewards program which is aimed at making sure that the USDC acceptability is ensured. Members of the Centre Consortium that backs the initiative include a well-known crypto startup Circle who is the creator of the USDC, and Coinbase, who are the strategic partners.
The rewards earned are paid monthly in realtime and can be exchanged into other cryptocurrencies on the cryptocurrency exchange. The mechanism of accrual of the USDC is daily. Circle as the creator of the cryptocurrency token has already issued 1 billion tokens in circulation.
Running off the Ethereum blockchain USDC as a token, which is ERC 20 compatible, makes remittance easy even for the simplest minds. It is already tradeable on three of some of the worlds’ largest cryptocurrency exchanges: Binance, Poloniex, and Coinbase.
Circle has made the kind of inroads that most cryptocurrency startups dream about. As a recipient of the first BitLicense from the New York State Department of Financial Services, Circle first started as a credit card to cryptocurrency purchase platform which made purchasing Bitcoin easy and instant in most cases.
From there, the startup then began operating cryptocurrency wallets which it cased in 2016. Circle has raised about $245 million in funding from venture capital partners who have made the company become one of the most innovative in the crypto space. In 2018, Circle also purchased popular cryptocurrency exchange Poloniex as part of its offerings to its customers.
Circles’ involvement with Coinbase rather than Poloniex in the launching of its USD backed token is in no way a conflict of interest. It is rather a critical partnership in progress as the Coinbase is by far the largest cryptocurrency exchange in North America. Hence, having a partner such as Coinbase makes perfect sense for starters.
Centre has brought to light an innovation that will ensure the faster adoption of cryptocurrency tokens in particular and other forms of financial technology in general. Rewards, interest and other forms of gain will bring many to see that cryptocurrencies have the same advantages as regular currencies. The major difference is that money that is driven by math shall rule over money driven by fiat.