Coinbase customers can now earn 4% USDC rewards despite SEC scrutiny

Coinbase announced an increase to its USDC rewards program on Thursday, now offering customers a 4% return on their stablecoin holdings. 

Previously, the company offered a 2% rewards rate on USDC that customers hold on its platform. The increase aims to incentivize more users to use Coinbase services to store their USDC.

Coinbase said the reward rates were subject to change and “customers will be able to see the latest applicable rates directly within their accounts.”

Separating USDC rewards from SEC allegations

This move comes at a time when the company faces scrutiny from the U.S. Securities and Exchange Commission (SEC), which sued the crypto exchange earlier this month, alleging it had violated securities laws. 

One of the claims Coinbase faces from the SEC is that its staking service is an investment contract that the company failed to register. Coinbase has distanced the rewards program from the targeted services, clarifying that “you cannot stake USDC, but customers in certain regions may be eligible to earn rewards on USDC” on its USDC page.

Coinbase also tried to offer 4% APY on USDC deposits via its proposed Lend program in 2021. However, it canceled the plan after the SEC said it intended to sue the company over Lend.

In contrast, Coinbase finances the USDC rewards from its own funds, according to its FAQs, and does not lend or redeploy the assets without permission from users. 

USDC is the second-largest U.S. dollar-pegged stablecoin behind Tether’s USDT, with a circulating supply of $28.2 billion.