The Nasdaq listed exchange announced that Coinbase Advanced, a trading platform aimed at sophisticated traders, will “offer rewards of up to 4% on USDC held at Coinbase or used in open orders
Coinbase also disclosed that a 4% USDC bonus on June 15, but warned that "rates are subject to change and may fluctuate."
According to the FAQ article, Coinbase has not loaned USDC to customer accounts, claiming it “has no right to use these funds.”
“USDC Rewards is Coinbase’s self-funded loyalty program. The program aims to encourage more customers to use his Coinbase services and save their USDC.
The 4% yield offer is important as it competes with APY, a high-yield savings account from a major bank.
Apple's credit card-linked savings account, launched in April, has an annual interest rate of 4.15%. However, Bankrate, which tracks and rates financial instruments, revealed that there were some savings accounts that outperform Coinbase's 4%. Capital One, like Apple, has accounts that offer an annual interest rate of 4.15%.
Coinbase Lend, a program that faced regulatory hurdles and was eventually discontinued due to threats of legal action from the SEC, originally planned to reward traders with an APR of 4% of USDC. The program was announced for 2021 but was later discontinued.
Contrary to what Coinbase currently offers, Lend would have loaned USDC to “verified borrower” customer accounts. Choosing to participate in the program may result in the user's funds being removed from Coinbase custody.