• Coinbase CEO Brian Armstrong recently addressed investor concerns over the SEC’s crackdown on staking products.
• He claims that Coinbase’s staking is self-custodial, meaning that users retain custody of their funds.
• Customers can also access a 1.5% APY on holding USDC, though this does not come from staking.
Coinbase Staking is Self-Custodial
Coinbase CEO Brian Armstrong recently addressed investor concerns over the SEC’s crackdown on staking products. He claims that Coinbase’s staking product differs from Kraken’s, as users retain custody of funds and provides services to help them participate in staking, which is a decentralized protocol.
SEC Regulatory Scrutiny
Recently, stablecoins and staking products came under the crosshairs of the US Securities and Exchange Commission (SEC). Since the FTX collapse, crypto exchanges have been under intense regulatory scrutiny. In response to these circumstances, Coinbase wants to work with regulators to protect customers.
USDC ‚Staking‘ Program
In February, rival exchange Kraken settled a $30 million lawsuit against the SEC over crypto staking prohibiting it from offering staking products in future. To address investor concerns in this scenario, Coinbase offers two ways for users to earn rewards on their crypto; Staking and DeFi yield programs. Its Staking services allow users to retain custody of their wallets while DeFi yield program relies on lending crypto to third-party DeFi protocols but is currently unavailable for US customers due to regulatory concerns.
USDC Rewards Program
However, US customers (except those residing in Hawaii) can access its USDC rewards program where they advertise 1.5% APY for all users holding at least $1 in USD. Armstrong said he is „quite bullish“ on USDC whose issuer is Circle – a Coinbase partner – making clear that these rewards are not coming from “staking” per se but from other means like holding them for longer periods or through its partner’s programs etc..
In conclusion, Coinbase CEO has no concerns over stablecoins and remains bullish on USDC despite SEC’s “investigative subpoenas” as just requests for information related to its use of blockchain technology such as its “staking” product which allows customers to retain custody of funds without turning them into Coinbase itself thus providing more security measures than ever before catering to customer needs by working with regulation bodies