Key Insights:
- Coinbase will start offering 4.1% rewards on USDC balance for Canadian users.
- The exchange says it is a customer loyalty program, not a savings account.
- Coinbase’s Chief of Policy criticises big banks for trying to end stablecoin rewards.
Coinbase announces 4.1% reward on USDC balance for Canadian Customers
Foremost US crypto exchange Coinbase has introduced 4.1% rewards on Circle USDC balance for Canadian users.
The exchange announced the launch of the reward scheme in a blog post, noting that it would be paid weekly. It described it as an alternative to traditional products such as savings and checking accounts.
It said:
Coinbase CEO Brian Armstrong also shared the development on X. He said the 0% interest rate for most checking accounts makes zero sense.
Meanwhile, Coinbase explained that introducing the USDC rewards is based on the customers’ demand for such products in Canada. The company claimed that most checking accounts in the country have a zero percent interest rate.
The firm cited an Angus Reid research, stating that 83% of Canadians want the global financial system to be overhauled. 91% also believe big banks prioritize profits over customers’ financial success.
Coinbase stated that it plans to change that by rewarding customers’ loyalty. While the users will get a 4.1% for all USDC held on the exchange, Coinbase One members get 4.5% rewards.
However, the boosted rewards for Coinbase One members are capped at $30,000 USDC, after which the reward rate returns to 4.1%. The exchange added that users can still convert, spend, or withdraw their USDC.
Coinbase says USDC rewards are a customer loyalty program
Meanwhile, Coinbase announced that the reward is a customer loyalty program offered at its discretion. The exchange clarified that the program is not a savings account or a securities offering.
This clarification is a deliberate attempt to avoid potential legal actions for offering unlicensed financial products. Coinbase has been central to similar enforcement actions, particularly in the US.
The exchange also added that users automatically opt into the program once they buy USDC. However, those who want to opt out can do so, and the rate is subject to change.
Meanwhile, the new product is expected to benefit USDC further and help its growth. The stablecoin, second only to Tether USDT with over $72 billion market cap, has grown by 7% in the past month.
Although it is still far from USDT’s $170 billion circulating supply, its growing integration through Coinbase highlights massive adoption.
Coinbase executive criticizes big banks
Coinbase introduced USDC rewards in Canada a few days after its Chief Policy Officer criticized big banks attacking stablecoins.
The executive, Faryar Shirzad, claims that banks object to some language inside the GENIUS Stablecoin Act. According to him, banks claim there is an interest loophole in the Act that allows exchanges to pay rewards on stablecoins.
He criticized the lobbying attempts to remove this for stablecoins, with banks saying it hurts their competitiveness and affects deposits. Shirzad noted the concern about the deposit flight from banks is unfounded.
He said:
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
