Coinbase announced the launch of a new program called ‘USDC Rewards, ’ which enables US customers to earn 1.2 percent a year compounded monthly by simply storing Circle’s stablecoin in their accounts.
The US crypto exchange explains that users can still decide on tokens they hold in real-time as it does not lend or manage USD Coins, while hodlers will be able to retrieve funds with guaranteed interest on a monthly basis.
Coinbase details that eligible customers don’t need to take any action as they will be automatically enlisted into the ‘USDC Rewards’ program.
The crypto venue also said the new feature helps clients switch between saving and trading instantly as from now, they don’t need to transfer between their bank and crypto brokerages, which often takes up to five days.
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Other crypto exchanges already allow users to stake their crypto holdings, including Coinbase itself, which offers the service for institutional clients since April.
Coinbase boosts USDC dominance
The launch of USDC Rewards marks another step to achieve Coinbase’s goal of increasing adoption of the US dollar-pegged stablecoin that popped up somewhere in the middle of 2018. Coinbase has also boosted USDC dominance by making it the only way to convert fiat to crypto without fees on its institutional platform, Coinbase Pro.
USDC has widened its percentage of total stablecoin supply in circulation to over 10 percent. The gains come as Tether conceded its dominance to other alternatives, including Circle’s coin, Paxos Standard, and the Gemini Dollar. The most controversial cryptocurrency saw its market share falling to below 70 percent, compared with over 95 percent earlier in December 2018. At the beginning of 2018, the coin had control over the entire stablecoin ecosystem.
Coinbase’s own USDC coin in circulation hit more $1 billion and is currently the world’s second-largest stablecoin. The dollar-backed token was created by both Coinbase and Goldman-funded startup Circle.