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Coinbase to Retain USDC 4.1% APY Rewards Amid Regulatory Constraints

Following the enactment of the GENIUS Act, Coinbase and PayPal argue that their rewards programs on USDC and PYUSD, respectively, are not subject to the yield ban, amidst robust global stablecoin interest.

USDC
PYUSD

Summary

Amid the new US GENIUS Act banning yield offerings for stablecoin issuers, Coinbase and PayPal maintain rewards programs—with Coinbase offering 4.1% APY on USDC and PayPal 3.7% on PYUSD—arguing that they are not the issuers and thus exempt from the law.

Terms & Concepts
  • APY: Annual Percentage Yield, representing the rate of return on an investment accounting for compound interest.
  • GENIUS Act: US legislation that prohibits stablecoin issuers from offering interest or yield to users, reinforcing stablecoins as payment tools.
  • PYUSD: A stablecoin associated with PayPal, issued by Paxos, which offers yield programs while distinguishing issuer responsibilities.