Coinbase Offers Interest for Storing USDC
Coinbase is offering a small interest rate for keeping USD Coin (USDC) on its platform.
Coinbase is offering a 1.25 annualized interest rate on storing USD Coin (USDC) on its platform. The fee may help to offset fees, and is relatively small in comparison to other interest rate schemes offered for the USDC stablecoin.
USDC is one of the coins going through accelerated acceptance and minting. As of October 2, the supply of USDC grew by about 8% overnight. Additionally, whale-watching bots have noticed increased activity on the network. In the past day, 30 million USDT were minted and sent into the crypto ecosystem.
USDC in on track to enter the top 20 of digital assets, after growing its supply from under $25 million to above $455 million in market capitalization. The USDC coin is one of the more trustworthy assets, showing evidence of being backed by fiat.
USDC is increasingly influential, as it is integral to Poloniex trading, as well as being an important asset for Binance. USDC has a highly active USDC/USDT market, where 7% of overall volumes are concentrated. Additionally, USDC brings in 7% annualized interest rate from Binance lending, as well as 10% in the riskier Poloniex lending.
USDC has a 1.16% of the entire stablecoin market. The supply is sufficient, and only about 39% of the coins are traded each day. There are thus enough idle coins to warrant a use case as a lending asset that can be stored instead of traded. USDT, on the other hand, sees each coin turn over through exchanges more than three times in 24 hours.
Stablecoins are showing greater variation in their background stories. Tether (USDT) is still the leading asset, but the group of USDC, PAX and TUSD is gaining strength. The other competitor is DAI, a stablecoin backed by algorithmic trading and an Ethereum (ETH) collateral of minimum 150%.
In addition to those stablecoins that originated among crypto startups, there are the assets backed by larger banks and used for internal trading, such as the dollar-pegged coin of J. P. Morgan. Facebook also plans to offer a stablecoin, though one backed by a basket of currencies. The nominal value of Libra would also be $1.