Coinbase has increased the interest rate on USDC deposits to 5%, up from the 4% rate introduced earlier this year. This adjustment represents a significant 150% increase from the 2% reward rate that was in place as of June 9.The decision to raise the reward rate to 4% on June 15 followed an SEC filing in which the regulatory body clarified that it did not view USDC or any stablecoin as unregistered securities offerings. This clarification meant that rewards offered for holding stablecoins did not violate existing regulations.It’s worth noting that while rewards for holding stablecoins were deemed compliant, the SEC labeled staking rewards for cryptocurrencies as unregistered securities offerings. Additionally, the SEC had previously blocked Coinbase’s Lend program in 2021 due to regulatory concerns.The current USDC reward program is funded directly by Coinbase and is structured differently from contentious programs like the Lend initiative, which aims to lend users USDC to generate rewards.
Coinbase’s aggressive increase in the USDC reward rate underscores its commitment to driving greater adoption of stablecoins, especially since its market share has lagged behind that of its competitor, Tether (USDT), over the past year.Circle CEO Jeremy Allaire has cited U.S. regulatory crackdowns as a contributing factor to the decline in USDC’s market capitalization. USDC faced challenges when $3.3 billion of its reserves became temporarily inaccessible at Silicon Valley Bank during a banking crisis in the United States, causing the stablecoin to briefly detach from its dollar peg.As a result of these challenges, USDC’s market share dropped to a two-year low of 21.91% by the end of July, down from its previous high of 33.27%. In contrast, USDT’s market share increased from 49.48% to 68.87% during the same period.While USDC has struggled to regain the market share it lost to USDT earlier in the year, it has shown signs of gaining momentum in recent weeks.
Source : [Coinbase Increases USDC Interest Rate to 5%](news.google.com/rss/articles/CBMiR2h0dHBzOi8vd3d3LmtyeXB0b21vbmV5LmNvbS9jb2luYmFzZS1pbmNyZWFzZXMtdXNkYy1pbnRlcmVzdC1yYXRlLXRvLTUv0gEA?oc=5) undefined - Coinbase USDC interest•- KryptoMoney / September 11, 2023