With $37 billion in Total Value Locked (TVL), USDC stands as the second-largest stablecoin in the crypto ecosystem. In August 2023, Coinbase joined Circle to form the Center Consortium, the new governing body for USDC. This partnership allows Coinbase to actively influence USDC's development and adoption.
Key Highlights:
- Coinbase's Role: As part of the Center Consortium, Coinbase now plays a pivotal role in shaping USDC's future.
- Passive Earnings: Coinbase Wallet introduced a 4.7% APY yield for USDC holders, though the source of these rewards remains undisclosed.
Coinbase Introduces Native Yield for USDC
USDC is a centralized stablecoin backed by a dollar-denominated reserve held by the Center Consortium. Since joining the consortium, Coinbase has launched initiatives to bolster USDC's utility.
On November 20, Coinbase Wallet announced the launch of native yield for USDC, enabling users to earn passively by holding the stablecoin.
"For the first time, earn 4.7% APY with USDC Rewards simply by holding USDC in your on-chain wallet."
How to Activate USDC Rewards
- Open the Coinbase Wallet app.
- Navigate to the USDC asset page.
- Enable the "USDC Rewards" feature.
Rewards are distributed monthly on the Base network. While the feature is available in most regions, US users will gain access in coming weeks, and European/Canadian users will follow later.
👉 Learn more about stablecoin yields
Frequently Asked Questions (FAQ)
1. Is the 4.7% APY guaranteed?
No—yields may fluctuate based on market conditions and protocol adjustments.
2. How does USDC differ from other stablecoins?
Unlike algorithmic stablecoins, USDC is fully collateralized by cash reserves audited by the Center Consortium.
3. Are there fees for USDC Rewards?
Coinbase Wallet does not charge fees for participation, but network (gas) fees may apply for transactions.
4. What’s the minimum USDC balance to earn rewards?
The announcement did not specify a minimum, but small balances may yield negligible returns.
5. Can I withdraw rewards anytime?
Yes, rewards are credited monthly and can be withdrawn or reinvested.
Expanding USDC’s Ecosystem
Coinbase continues to innovate beyond stablecoins, recently venturing into wrapped Bitcoin (cbBTC). This move led to the removal of wBTC from its platform, sparking controversy with issuer BitGo.
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