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U.S. Rep. Bill Foster (D-Ill.), who also co-chairs the blockchain caucus, believes a trusted third-party, such as the courts, should have access to a crypto backdoor.

In an interview with Axios on Tuesday, the congressman said until the industry could grapple with crypto-ransomware attacks, total anonymity would be “very hard to sustain.”

Foster said new legislation and rules could establish a type of pseudo-anonymity where only judicial powers would have access to certain information. The congressman suggested allowing the court to use its access to a “very heavily guarded key” a “cryptographic backdoor in essence” allowing it to reverse transactions on the blockchain.

Related: State of Crypto: Inside the NRCC’s Plan to Accept Crypto Donations

“You (authorities) have to be able to go to court to unmask participants under some circumstances,” said Foster. “It does not have to be visible to the whole world.”

The congressman also drew a distinction between digital and physical assets in the context of ransomware attacks, providing an example of unmarked dollar bills being put in a trash can versus total anonymity afforded to hackers.

Asked whether the Federal Bureau of Investigation’s retrieval of bitcoin from the Colonial Pipeline ransomware attackers last month afforded a solution to the problem, the congressman said recouping funds would eventually become “more difficult.”

The fundamental decision one has to make when it comes to crypto is between retaining true anonymity versus being able to unmask participants and reverse fraudulent or mistaken transactions, the congressman noted.

Related: NYC Mayoral Front Runner Eric Adams Says City Will Become ‘Center of Bitcoins’

“There’s not a technological alternative that I am aware of,” said Foster. “I think for most people, if they are going to have a big part of their net worth tied up in crypto assets they’re going to want to have that security blanket of a trusted third-party.”

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U.S. Representative Bill Foster (D-Ill.), who also co-chairs the blockchain caucus, believes a trusted third-party, such as the courts, should have access to a crypto backdoor.

In an interview with Axios on Tuesday, the congressman said until the industry could grapple with crypto-ransomware attacks, total anonymity would be “very hard to sustain.”

Foster said new legislation and rules could establish a type of pseudo-anonymity where only judicial powers would have access to certain information. The congressman suggested allowing the court to use its access to a “very heavily guarded key” a “cryptographic backdoor in essence” allowing it to reverse transactions on the blockchain.

Related: State of Crypto: Inside the NRCC’s Plan to Accept Crypto Donations

“You (authorities) have to be able to go to court to unmask participants under some circumstances,” said Foster. “It does not have to be visible to the whole world.”

The congressman also drew a distinction between digital and physical assets in the context of ransomware attacks, providing an example of unmarked dollar bills being put in a trash can versus total anonymity afforded to hackers.

Asked whether the Federal Bureau of Investigation’s retrieval of bitcoin from the Colonial Pipeline ransomware attackers last month afforded a solution to the problem, the congressman said recouping funds would eventually become “more difficult.”

The fundamental decision one has to make when it comes to crypto is between retaining true anonymity versus being able to unmask participants and reverse fraudulent or mistaken transactions, the congressman noted.

Related: NYC Mayoral Front Runner Eric Adams Says City Will Become ‘Center of Bitcoins’

“There’s not a technological alternative that I am aware of,” said Foster. “I think for most people, if they are going to have a big part of their net worth tied up in crypto assets they’re going to want to have that security blanket of a trusted third-party.”

See also: NYC Mayoral Front Runner Eric Adams Says City Will Become ‘Center of Bitcoins’

Related Stories

• Examine Blockchain for Ways to Stop Forced-Labor Goods, Australian Committee Says
• Republican House Campaign Arm to Accept Donations in Crypto

Australia needs to tread carefully should it eventually launch a crypto exchange-traded product (ETP), the country’s financial regulator said Wednesday.

In a consultation paper from the Australian Securities and Investment Commission (ASIC), the regulator is reaching out to market participants for feedback on whether crypto underlying products can meet existing ETP expectations.

ASIC said it is attempting to evaluate whether cryptos are appropriate underlying assets, whether they could be reliably priced, and how they should be classified with respect to underlying asset rules, according to the paper.

Related: Bitcoin Upside Stalls; Could Find Support Near $30K-$33K

The paper seeks feedback in two main areas on how an ETP may affect the market including compliance costs and effects on competition. ASIC’s request for feedback comes as the Australian Securities Exchange, one of the country’s major bourses, is considering applications for the launch of a domestic ETP by year’s end.

“At this point in time, in our view, the only crypto-assets that are likely to satisfy these factors are bitcoin and ether,” the regulator said.

How product issuers can ensure these products are compliant with the existing regulatory framework, including with respect to custody, risk management, and disclosure were also mentioned for consideration.

In Australia, there are three types of categories that fall under an ETP including exchange-traded funds, managed funds, and structured products – a security or derivative which gives financial exposure to the performance of underlying instruments.

Related: Bitcoin Set for Record Second-Quarter Price Drop

“We are aware of interest in, and demand for, domestic crypto-asset ETPs,” said the regulator. “However, we are also aware of the real risk of harm to consumers and markets if these products are not developed and operated properly.”

Comments need to be submitted to the regulator by July 27 with those wishing to provide feedback having the option to remain anonymous or use an alias.

See also: ASX Boss Says His DLT Settlement System Will Be Bigger Than All of Crypto Market

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Australia needs to tread carefully should it eventually launch a crypto exchange-traded product (ETP), the country’s financial regulator said Wednesday.

In a consultation paper from the Australian Securities and Investment Commission (ASIC), the regulator is reaching out to market participants for feedback on whether crypto underlying products can meet existing ETP expectations.

ASIC said it is attempting to evaluate whether cryptos are appropriate underlying assets, whether they could be reliably priced, and how they should be classified with respect to underlying asset rules, according to the paper.

Related: Market Wrap: Bitcoin Pushes Higher as Short Bets Unwind

The paper seeks feedback in two main areas on how an ETP may affect the market including compliance costs and effects on competition. ASIC’s request for feedback comes as the Australian Securities Exchange, one of the country’s major bourses, is considering applications for the launch of a domestic ETP by year’s end.

“At this point in time, in our view, the only crypto-assets that are likely to satisfy these factors are bitcoin and ether,” the regulator said.

How product issuers can ensure these products are compliant with the existing regulatory framework, including with respect to custody, risk management, and disclosure were also mentioned for consideration.

In Australia, there are three types of categories that fall under an ETP including exchange-traded funds, managed funds, and structured products – a security or derivative which gives financial exposure to the performance of underlying instruments.

Related: How the Macro Landscape Is Shaping Bitcoin Markets

“We are aware of interest in, and demand for, domestic crypto-asset ETPs,” said the regulator. “However, we are also aware of the real risk of harm to consumers and markets if these products are not developed and operated properly.”

Comments need to be submitted to the regulator by July 27 with those wishing to provide feedback having the option to remain anonymous or use an alias.

See also: ASX Boss Says His DLT Settlement System Will Be Bigger Than All of Crypto Market

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Decentralized finance (DeFi) lending platform Cream Finance on Tuesday announced an upcoming integration with the Ethereum layer 2 scaling solution Polygon.

Cream Finance’s smart contract money markets allow users to borrow and lend supported assets.

According to Cream, the integration with Polygon, which has $8.64 billion in total value locked, will lead to faster transaction speeds, lower gas fees, and access to additional markets for its users. At the time of the launch, which has not yet been specified, Cream’s users will be able to lend and borrow 10 digital assets, including USDC, USDT, DAI, WMATIC and LINK.

Related: More Energy-Efficient Blockchains Are Possible. Here’s How

The Polygon network is growing: Institutional investors are pouring money into Polygon as demand for Ethereum-compatible blockchain networks grows, and DeFi developers and users are flocking to the platform in search of cheaper gas fees and fast block times. And Cream isn’t the only lending platform to join forces with Polygon. Earlier this month, Kyber Exchange announced its own integration with the platform.

In a tweet on Tuesday, Cream confirmed its Polygon markets will be incentivized by $MATIC liquidity mining opportunities.

The announcement also confirmed that Cream’s assets on Polygon will be covered by Chainlink oracles.

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The Spanish Socialist Party (PSOE), the governing political body in Spain, has proposed creating a national digital currency.

PSOE, which holds the presidency of the country and is the leading force in the Chamber of Deputies, presented a non-law proposition (PNL) which looks to launch a national digital currency in response to decreased usage of physical cash, according to the Spanish newspaper El Economista. 

The PNL argued that new payment trends lead to a “purely private and more insecure money” while its proposal is committed to “the recovery of money as a public good, more stable and under democratic control.” 

Related: Power, Privacy and China’s Digital Currency

PSOE promoted this measure after the European Central Bank (ECB) announced its intentions to create a digital euro, the report added. 

Last week, the European Union designated the Bank of Spain and the National Securities Market Commission, Spain’s stock market regulator known as CNMV, to oversee crypto assets in the country. 

Carlos Conesa, general director of the financial innovation division at the Spanish Central Bank (Banco de España), said this month that “the decision to launch a project on the digital euro is very close,” the report added.  

PSOE considered that a national digital currency would allow more liquidity in the system. “In the event that a monetary expansion is necessary, it allows a more direct mechanism, by injecting liquidity directly into current accounts and thus transferring it immediately and without intermediaries to economic activity”, the PNL pointed out.

Related: Stablecoins and CBDCs: Private Vs. Public Monetary Innovation

If the proposal prospers, it would serve the government to eliminate the brake mechanisms that limit inflation such as the money supply, the article added, citing specialists. 

“It would be subject, as at present, ultimately to control by the representatives of the citizenry, who set its monetary policy objectives,” PSOE argued in its PNL presented in Congress.

PSOE insisted that the project would be achieved “without the nationalization of the banking system or the nationalization of credit.”

A digital currency would end the “privilege” of banks over money, the text stated, defining a national digital currency as “a digital public money, intangible and perfectly usable to make electronic payments, but in this case backed by the state, making it a safe money.” 

“At present, it is perfectly feasible that each individual can have his own account with his digital money directly at the central bank. A privilege, for the moment, restricted to banks,” the text added. 

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USDC, the stablecoin now native to four blockchains, could soon be on eight to 10 more networks, CoinDesk has learned.

It’d be the broadest expansion of the $25 billion stablecoin to date, potentially surpassing the eight blockchains that support Tether’s USDT, the market leader with a $63 billion market cap.

“We anticipate that in the coming months USDC will become available on Avalanche, Celo, Flow, Hedera, Kava, Nervos, Polkadot, Stacks, Tezos, and Tron,” according to a draft announcement from USDC administrator CENTRE obtained by CoinDesk.

Related: CEO Brian Armstrong Flags Self-Custody, DeFi Access As Coinbase Priorities

The expansion comes as stablecoins draw increasing scrutiny from regulators, with Eric Rosengren, president of the Federal Reserve Bank of Boston, specifically mentioning USDT and even the relatively obscure TITAN in a recent talk about emerging systemic risks. While Fed Vice Chair Randal Quarles followed with more positive remarks about stablecoins, it is clear the sector is squarely on Washington’s radar.  

CENTRE, which is a consortium run by crypto exchange Coinbase and payments firm Circle, said expanding to other chains helps “drive individual and enterprise adoption of open blockchain technologies.”

“We anticipate that USDC on these blockchain platforms and multichain protocols will further accelerate the use of the world’s fastest growing digital dollar currency,” CENTRE said in the draft announcement.

USDC was launched on Ethereum in 2018 and expanded to Algorand, Stellar and Solana in the second half of 2020.

Related: Stablecoins and CBDCs: Private Vs. Public Monetary Innovation

The potential expansion to other blockchains follows a pair of announcements showing momentum behind USDC as an interest-generating savings vehicle. Circle announced its Circle Yield and DeFi API products late last week.

In its draft announcement, CENTRE said updates on the timing of the further integrations would be issued “over the balance of the year.”

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Decentralized finance (DeFi) is “the future of where the industry is going,” according to Coinbase CEO Brian Armstrong. In a Tuesday blog post he delineated how his cryptocurrency exchange will serve the growing demand for DeFi products and services.

“We’re seeing crypto quickly mature … to the trading of thousands of new assets, and the adoption of new use cases” including DeFi, non-fungible tokens (NFT), smart contracts, decentralized autonomous organizations (DAOs) and more, Armstrong wrote.

Just as Coinbase has “helped people access bitcoin for the first time … we need to do the same for the decentralized cryptoeconomy,” he said.

Related: USDC Stablecoin Could Soon Expand to 10 More Blockchains

Armstrong wrote that Coinbase expects to add assets to the platform more quickly, broaden its geographic focus to ship products “that work globally” and construct a crypto app store, akin to Apple’s.

In the more immediate future, Armstrong wrote, Coinbase would cut the length of its legal review to evaluate asset issuers from 70 to 12 questions and create a more efficient compliance and security review process. Coinbase will also construct what he termed “an experimental zone for new assets” ensuring the company can provide a fuller picture of their risks for customers, and take steps so that users can access “most assets for basic wallet functionality.”

Armstrong promised to send more products to new international markets, while still working with regulators “in more established markets,” and that “any app built on decentralized crypto rails will be accessible to users of the Coinbase app.”

He added that customers would have “the option to do self-custody of their crypto in the main Coinbase app.”

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Bitcoin traded higher on Tuesday, rising about 6% over the past 24 hours. Cryptocurrencies are in relief mode as selling pressure from May stabilizes in a tight range between $30,000 and $40,000. Traders are watching for signs of capitulation as bitcoin appears to be oversold and shorts unwind positions.

Crypto markets have been resilient despite regulatory crackdowns in China and the U.K. On Monday, Reuters reported that several companies have abandoned their efforts to register with the U.K.’s Financial Conduct Authority amid mounting regulatory scrutiny on the industry.  

“Prices rising in the face of bad news may be a sign of the seller exhaustion we need to go higher,” David Grider, a strategist at FundStrat, wrote in a newsletter on Monday.

Latest prices

Related: How the Macro Landscape Is Shaping Bitcoin Markets

Cryptocurrencies:

• Bitcoin (BTC) $36387.21, +5.74%
• Ether (ETH) $2221.89, +5.27%

Traditional markets:

• S&P 500: 4291.67, +0.025%
• Gold: $1761.22, -0.97%
• 10-year Treasury yield closed at 1.475%, compared with 1.472% on Monday

Where to from here

“We do think this could continue to be a choppy market for a bit as prices reestablish their trend, and we could even retest the $31K level, but overall, we remain in the bullish camp over the balance of the year,” Grider wrote.

From a technical perspective, bitcoin’s long-term trend remains intact despite the loss of intermediate-term momentum. The $34,000 price level has prevented secondary support near $27,000 from becoming relevant, according to Katie Stockton, managing partner at Fairlead Strategies.

Related: Musk’s Tweets Swayed Some Investors on Bitcoin Environmental Concerns, Survey Shows

“We would view a breakout above the 50-day moving average [around $38,000] as a positive catalyst supporting a test of secondary resistance near $44K,” Stockton wrote in a report published Monday. 

The big economic data point analysts are awaiting this week is Friday’s U.S. jobs report, which could affect assets that are deemed to be risky, including cryptocurrencies. 

“If Friday’s employment numbers come in stronger than expected, market participants could anticipate the Fed raising rates sooner than expected,” Alexander Blum, managing partner at digital asset manager Two Prime, wrote in an email to CoinDesk.

A strong jobs report could be bearish for digital assets in the near-term, according to Blum, while a weaker-than-expected number would be bullish. 

Returns collide

Bitcoin’s year-to-date return of about 20% is beating the S&P 500 Index, but trailing the Thomson Reuters Core Commodity Index. 

Over the past year, bitcoin and ether had a similar risk-adjusted performance to popular U.S. stocks such as Alphabet (NASDAQ: GOOG) and Tesla (NASDAQ: TSLA).

Bitcoin cycle decoupling

The current bitcoin bull cycle has decoupled from the 2013 and 2017 cycles. This is due to a combination of factors including regulatory crackdowns, environmental concerns and an occasional tweet from Tesla CEO Elon Musk, which interrupted the 2021 bull cycle. 

“It’s important to note that each cycle is ultimately unique,” wrote Coin Metrics, in a newsletter published Monday. “Every halving has effectively signaled the start of a new cycle, with the 2013 cycle peaking 370 days after the first halving, and the 2017 cycle peaking 524 days after the second halving.”

Bitcoin is currently 413 days after the third halving, which occurred in May 2020, as shown in the chart below. 

Hedge funds unwind short positions

The open interest of bitcoin futures at CME Group in June is at a yearly low, with the open interest currently standing at $1.39 billion, according to data from Skew. 

It shows that hedge funds are now unwinding their short positions as cash-and-carry trades, a strategy that aims to exploit differences between spot and futures market, are not lucrative anymore, according to Arcane Research. 

Hedge funds were net shorting $1.5 billion worth of bitcoin contracts at its peak, and the number has fallen to $400 million, according to Arcane. 

Altcoin roundup

• Ethereum transaction fees: Ethereum transaction fees have dropped to their lowest since December because blockchain activity has cooled while use of Ethereum layer 2 solution protocols such as Polygon (MATIC) has heated up. Gas refers to the computational efforts required to execute specific operations on the Ethereum network. A fee, paid in ether, is required to successfully conduct a transaction on Ethereum.
• DeFi Meets AI: Fetch.ai, a Cambridge, U.K.-based artificial-intelligence lab with a penchant for crypto, has launched a service to combat the risk of losses across the experimental decentralized finance (DeFi) market. The DeFi Agents toolkit can be set to automatically withdraw users’ funds from Uniswap v2 and PancakeSwap based on predefined conditions such as the exchange rate for a given token dropping to a certain level.

Relevant news

• Cathie Wood’s ARK Invest, 21Shares Team Up to Enter Bitcoin ETF Race
• Coinbase Debuts Savings Product With 4% APY on USDC Deposits
• Tom Brady, Gisele Bündchen Become Part Owners of FTX

Other Markets

All but one digital assets on the CoinDesk 20 ended up higher on Tuesday.

Notable winners as of 21:00 UTC (4:00 p.m. ET): 

xrp (XRP) +11.95%

stellar (XLM) +8.99%

filecoin (FIL) +8.27%

Notable losers: 

USD Coin (USDC) -0.01%

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Argo Blockchain (LON: ARB) announced that it has secured a £14 million (US$20 million) loan from Galaxy Digital to expand its West Texas data center.

• Argo Blockchain said the loan agreement is for a term of six months and includes a portion of the company’s bitcoin holding as collateral.
• Proceeds will be used to continue the expansion of the company’s data center in West Texas and to meet its operating cash flow requirements. 
• In March, London-based Argo acquired the New York firm DPN LLC, bringing it ownership of a chunk of land in West Texas for the construction of a new cryptocurrency mining facility.
• “This agreement allows Argo to secure competitive terms on a loan facility while also allowing us to continue to HODL our bitcoin,” Argo CEO Peter Wall said.

Read more: Argo and DMG Join Group Working to Lower Bitcoin Miners’ Carbon Emissions

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Just under half of U.S. investors have a problem with bitcoin’s environmental issues, with some of them apparently swayed by Tesla CEO Elon Musk’s tweets on the matter, a new survey shows.

Some 49% of 1,103 respondents to the Investing.com survey said that “bitcoin being environmentally unfriendly” is an issue for them as an investor, according to a summary of the results posted on the information service’s website. 

The survey provides some evidence of how drastically some investors’ opinions on bitcoin changed after  Musk tweeted his concerns in May, when he reversed an earlier policy of accepting the cryptocurrency as payment for Tesla’s electric vehicles.

Related: Market Wrap: Bitcoin Pushes Higher as Short Bets Unwind

Since then, there’s been about a 40%% price drop for the world’s largest cryptocurrency, according to the CoinDesk Bitcoin Price Index. Cathie Wood, CEO of Ark Investments, said at the Robin Hood Investors Conference on June 16 that the downturn was due to investors’ growing awareness of the sheer amount of electricity it takes to mine the cryptocurrency. 

Some 70% of investors who took part in Investing.com’s survey said they would favor a more “green” cryptocurrency, while 36% didn’t even realize that bitcoin had environmental implications before Musk’s comments on the issue. 

According to Investing.com, 30% of the respondents sold their bitcoin last month, with one in five attributing the decision to Musk’s comments about the environment. 

Musk’s tweets on cryptocurrency were seen as “annoying” by 33% of respondents, “unfair” by 22% and “entertaining” by 27%, the summary reads. 

Related: How the Macro Landscape Is Shaping Bitcoin Markets

“After being hailed and crowned as king of the crypto community, Elon Musk has made himself some new enemies lately, following his recent shock about-face on bitcoin,” said Jesse Cohen, an analyst at Investing.com. “For an asset whose price is driven mostly by psychological sentiment and momentum, bitcoin could have a hard time recovering.”

When respondents were asked if Musk’s “manipulation of cryptocurrency values has changed their view of that investment,” 51% said Musk has “too much power” and 24% said they don’t believe the billionaire has too much influence. 

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Bitcoin mining company TeraWulf has agreed to purchase 30,000 mining machines from Bitmain.

• In a blog post on Tuesday, Bitmain said TeraWulf will buy Bitmain’s latest generation of miners dubbed the Antminer S19j Pro, which will be delivered from January to June 2022.
• Once the machines have been delivered and deployed, TeraWulf is expected to increase its total mining hash rate by 3 exahashes per second, which means the machines will be able to compute an extra 3 quintillion calculations per second. Quintillion is a number followed by 18 zeros.
• TeraWulf is set for a Nasdaq listing after it agreed to merge with Ikonics, an imaging-technology company whose stock trades on Nasdaq. The combined company will trade under the ticker symbol, “WULF.”

Read more: Bitcoin Miner TeraWulf to Merge With Nasdaq-Listed Ikonics

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Coinbase, one of the world’s largest cryptocurrency exchanges, plans to expand internationally and seeks to list every crypto on its exchange.

Cryptocurrency exchange Kraken said it has reduced deposit fees to zero across all its more than 70 digital assets, starting today.

• The reduction is expected to bring more stability to pricing between Kraken and decentralized finance (DeFi) protocols and applications, Kraken said.
• “By cutting out deposit fees, clients can experience the lowest possible friction on their crypto journey,” said Jeremy Welch, chief product officer at Kraken.
• Kraken said it is preparing for its long-term ambition to provide DeFi products and services from the exchange.

Read more: Kraken to No Longer Offer Margin Trading for US Investors Who Don’t Meet ‘Certain’ Requirements

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The past year-plus has seen a fresh explosion in cryptocurrencies. Companies are enabling payments via these digital assets or embracing the blockchain technology behind Bitcoin and others, creating a boon for some of the biggest cryptocurrencies.

Social token platform Coinvise has raised $2.5 million in a seed-funding round led by Galaxy Digital HK and IDEO CoLab Ventures.

“The overarching goal of Coinvise,” the firm wrote, “is to utilize social tokens as a means to incentivize better coordination within communities and enable creators to monetize their work without giving ownership to centralized platforms.”

It’s a vision in keeping with Web3’s “ownership economy” thesis, where a platform’s users also own it through a shared currency.

Related: A16z Leads $12M Investment in DeFi-Native Crypto Tracing Firm Nansen

Coinvise joins other social token platforms such as Rally, Roll and Fyooz, but offers a suite of tools aimed at making it easy for creators to use their tokens for “rewards, airdrops, crowdfunding, gated access and [non-fungible tokens],” the firm wrote.

The platform operates on both the Ethereum and Polygon networks.

Scalar Capital, A.Capital, DeFi Alliance, FreeCo, Global Coin Research, Perpetual Value, Morgan Beller and Block0 also joined the round. A laundry list of angel investors includes Jill Carlson, Jaynti Kanani, Alex Masmej and others.

“Coinvise is unlocking tremendous value for communities by streamlining the process around minting and exchanging social tokens as well as NFTs.” said investor Volt Capital’s Soona Amhaz. “We’re excited to work with CEO Jenil [Thakker] as he leads the way in building out the new creator economy.”

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In the eyes of its critics, Bitcoin can’t win. The normal knock on it is that it is way too volatile, whereas a month of relative stability, such as the one we have seen recently, is criticized as evidence that the boom is over.

Worldcoin, a startup founded by former Y Combinator head Sam Altman, wants to distribute crypto to everyone on the planet by scanning their eyeballs.

• The company has designed an orb-shaped unit that can produce a unique personal identifier from an iris scan, Bloomberg reported Tuesday.
• Altman, former president of startup accelerator Y Combinator, devised the concept in 2019 around experimentation on universal basic income and how money could be distributed to people in a way that circumvents the role of government.
• “I’ve been interested in things like universal basic income and what’s going to happen to global wealth distribution and how we can do that better, is there a way we can use technology to do that at a global scale,” Altman said to Bloomberg.
• Aspirations of financial inclusion are nothing new in crypto, though the concept of scanning eyeballs may be seen as a controversial way of achieving it.
• Worldcoin, whose backers include Andreessen Horowitz, Coinbase Ventures and LinkedIn founder Reid Hoffman, recently raised around $25 million from investors, Bloomberg said.

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Coinbase is rolling out a crypto savings account that lets you earn 4% annual percentage yield (APY) by lending out your USDC.

The account isn’t FDIC- or SIPC-insured and functions much like other products at crypto lenders and other exchanges that regularly offer yields around 8%. The reason why Coinbase is offering a comparatively lower yield is because it doesn’t lend to “unidentified third parties,” said Thorsten Jaeckel, senior product manager at Coinbase. 

Coinbase, which administers the USDC stablecoin in partnership with Circle through the CENTRE Consortium, appears to be aiming squarely for banks with its new product, touting rates “more than 50x the national average of a traditional savings account.”

Related: DeFi Meets AI: Fetch.ai Launches ‘Intelligent Automation’ for Uniswap V2 and PancakeSwap

The account is geared towards retail users and the yield is created by Coinbase lending out the USDC to “verified borrowers,” Jaeckel told CoinDesk via email.

It’s the second USDC savings product advertising 4% APY in as many days. On Monday, Compound Labs, the maker of the major Ethereum money market of the same name, announced the creation of Compound Treasury. That USDC-powered vehicle is aimed at fintechs and neobanks.

Pre-enrollment for the consumer-oriented Coinbase product is now open for eligible customers in the U.S.; users in Hawaii and New York are not eligible.

The USDC product arrives less than a year after Coinbase rolled out its bitcoin lending product, which has been equally conservative. Coinbase capped credit lines at $20,000 per customer and offered an interest rate of 8% for BTC-backed loans with terms that are of a year or shorter.

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Related: A16z Leads $12M Investment in DeFi-Native Crypto Tracing Firm Nansen

“Rather than constantly monitoring price action and having to manually withdraw liquidity, Fetch.ai DeFi Agents simplify and streamline that whole process for LPs.” 

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