Coinbase partners with Morpho to launch USDC on-chain lending services, offering an annual yield of 10.8%.

The American exchange Coinbase partners with the lending protocol Morpho to launch USDC on-chain lending features through its L2 network Base, providing high yields of up to 10.8% APY. This not only challenges traditional banks and regulatory frameworks again but also highlights the impact and controversy of expanding stablecoin-based businesses within the global financial system.

Coinbase launches on-chain lending services, allowing depositors to enjoy a 10.8% APY.

Coinbase CEO Brian Armstrong announced today a collaboration with the lending protocol Morpho to launch an on-chain lending feature for USDC, allowing users to earn up to 10.8% annual yield on USDC held directly in the Coinbase App.

The announcement stated that Coinbase will create a smart contract wallet for users depositing USDC, automatically allocating funds to different lending pools to maximize returns:

Users will immediately start earning returns after making a deposit, and withdrawals can be made at any time, but the specific returns depend on liquidity.

(Is issuing stablecoins really that profitable? From Tether to Aave GHO, let's look at the profit truth for later participants )

Unlike "USDC rewards", it provides users with on-chain exposure and returns.

The yield is far higher than the 4.1% from simply holding USDC on Coinbase and the 4.5% "Rewards (Rewards)" for Coinbase One members.

(Coinbase launches a 4.5% interest rate to capture the market. Is the yield-bearing stablecoin targeting bank deposits really risk-free? )

Coinbase emphasizes that the earnings from the on-chain lending service are fundamentally different from USDC rewards:

USDC rewards do not involve lending user assets; this is a user loyalty program independently provided by Coinbase, and the incentive funds come directly from Coinbase's marketing budget.

In other words, on-chain lending funds will allow users to actually experience and participate in DeFi protocols while maintaining the operational convenience of Coinbase, providing them with exposure and additional收益.

Currently, this feature will be piloted in certain markets, with plans to expand to more regions in the coming weeks. This includes the United States ( excluding New York ), Hong Kong, the UAE, New Zealand, the Philippines, Taiwan, and South Korea. Coinbase stated that this move is part of its strategy to "enable users to participate more directly in the on-chain economy."

Stablecoin Yield Ban Controversy: Gray Area Under the GENIUS Act

However, Coinbase was previously criticized by the American banking industry group ( led by BPI for its USDC reward mechanism, which was seen as exploiting a loophole in the "GENIUS Act" by packaging a concept similar to interest income as rewards.

BPI pointed out: "Stablecoins are not bank deposits or investment securities, and issuers and distributors do not engage in lending activities, so they should not offer interest."

Today, Coinbase, through its own venture capital arm Coinbase Ventures, has invested in the project Morpho, integrating on-chain functionalities and providing lending services that are essentially no different from those of banks, undoubtedly making it another case of regulatory gray area.

)The U.S. banking industry demands to plug the "GENIUS" loophole: stablecoin interest could trigger a $6.6 trillion deposit outflow(

With the launch of Coinbase's new service, the lines between on-chain protocols and exchanges are becoming increasingly blurred. How to strike a balance between innovation and regulation will become an important focus for the future integration of exchanges in the crypto finance space.

This article announces that Coinbase has teamed up with Morpho to launch an on-chain USDC lending service, offering an annualized yield of 10.8%, first appearing in blockchain news ABMedia.