Coinbase Global has announced a new initiative aimed at Canadian users, introducing rewards on USD Coin (USDC) balances, with potential returns reaching up to 4.5 percent. This initiative, which started on September 16, 2024, allows Canadians to earn interest-like payouts simply by holding USDC on the Coinbase platform.
Under the new structure, all Canadian users will earn an annualized reward of 4.1 percent on their USDC, paid out weekly. Those who subscribe to Coinbase One, the company’s membership service, can enhance their returns to 4.5 percent for balances up to US$30,000; however, any amount exceeding this limit will continue to earn the standard 4.1 percent. Importantly, there are no lock-up periods or opt-in requirements, meaning users can withdraw or spend their USDC at any time without restrictions.
USDC, being a stablecoin, is pegged on a 1:1 basis with the US dollar and is backed by reserves including cash and short-term US Treasuries held by regulated institutions. This structure differentiates stablecoins like USDC from more volatile cryptocurrencies such as Bitcoin, as they are designed to maintain price stability, making them suitable for payments, savings, and yield-generating products.
A recent study by Angus Reid, conducted for Coinbase in August 2024, revealed significant public sentiment regarding the financial landscape in Canada. The research indicated that 83 percent of Canadians believe the global financial system requires substantial reform, while 91 percent feel that domestic banks prioritize profits over the financial wellbeing of their customers.
This Canadian rollout builds upon Coinbase’s previous initiatives, including the introduction of USDC rewards through Coinbase Wallet in November 2024, where a 4.7 percent annual yield was offered globally. The company emphasized the utility of USDC for combining “the stability of the U.S. dollar with the power and speed of the internet,” facilitating instant, borderless transactions.
The wallet-based rewards system also enhances cross-border efficiency through blockchain technology. Transactions executed on platforms like Base, which is Coinbase’s Ethereum Layer 2 chain, occur in real-time, thus avoiding the fees and delays commonly associated with traditional payment systems.
As stablecoins continue to gain traction within mainstream finance, several companies, including Visa and PayPal, have integrated these digital tokens into their platforms, allowing users to conduct payments and transfers in USDC and Tether’s USDT. By launching this initiative, Coinbase is positioning itself to attract users who are frustrated with traditional financial systems, seeking higher yields and faster payment options associated with digital assets.
