Coinbase wants to make decentralised finance even more popular. How?
Representatives of cryptocurrency exchange Coinbase said that users in more than 70 countries will soon be able to earn money by staking their crypto-assets in decentralised finance. Accordingly, the company itself aims to focus on DeFi development. According to Coinbase management, this market will be able to confidently rival the banking sector on a global scale in the next few years. We tell you more about what is happening.
As a reminder, the term "decentralised finance" refers to financial platforms that operate without a central authority, similar to banks. They allow you to borrow, lend money and simply change various assets without the involvement of third parties. Most importantly, everyone can access these services. All you need is an Internet connection and a cryptocurrency wallet with a certain amount of coins on it.
What cryptocurrency exchanges do
The announcement was accompanied by the launch of new services for Coinbase customers to work with decentralised protocols. They can now invest DAI stabelcoins, pegged to the value of the US dollar, through the Compound Finance platform to generate passive income. The amount of this income is not fixed and varies with the demand for DeFi products. Here’s a quote from the exchange’s announcement, published by Decrypt
We are making DeFi more affordable by allowing customers in over 70 countries to access attractive rates of return on DeFi lending on their DAIs without commissions, blockchain or setup issues.
In other words, the big news is that cryptocurrency exchange users will be able to earn handsome interest for holding Stablecoins, making it all resemble a bank deposit and without the risks of excessive volatility. It can certainly be done now, but you need to be a more experienced user and not just a fan of centralised cryptocurrency platforms and their products.
Coinbase
Decentralised finance is expected to be a major area of expansion for the company. Coinbase representatives continue.
DeFi has enormous potential to increase economic freedom, and we are pleased to provide a reliable and affordable way to participate in this trend.
It’s true that staking through Coinbase remains inaccessible to the exchange’s main market, the United States, for now. It’s all about the policies of the US Securities and Exchange Commission (SEC). Not so long ago SEC members openly criticized the platform’s new service called Lend, which focused on the possibility of depositing assets for profit.
Most likely, the reason was too high a rate of return on such "deposits", which put banks at a disadvantage.
Coinbase advertisement in New York
The negative stance of the US Securities and Exchange Commission is likely to change in the foreseeable future. As a reminder, the CEOs of major crypto exchanges made a presentation to the US Congress this week, where politicians were very optimistic about claims about the huge prospects for the crypto market. In other words, it is unlikely that a major US financial regulator will be able to withstand the onslaught of innovation adoption for long – especially given the strong development of the field in other countries, which creates a sense of lagging behind competition.
That onslaught may not be without another wave of Bitcoin growth. According to the CEO of the well-known Ark Invest fund Katie Wood, BTC has every chance to grow as high as $500,000. To do that, crypto market needs “only” 5 percent of capital of large institutional investors – that is, large professional market players.
Well, the most astute of these investors have been accumulating cryptocurrency for quite some time. This week, for example, MicroStrategy announced the purchase of another 1,434 BTC for $82.4 million. This brings the total digital asset under its management to 122,477 BTC, or $5.9 billion at the current Bitcoin exchange rate.
MicroStrategy CEO Michael Saylor
It should be noted here that MicroStrategy’s investments in Bitcoin in 2021 can hardly be considered a success. During that period, the company invested $2.532 billion in BTC. Today, given the current BTC exchange rate and MicroStrategy’s high purchase price, the return on Bitcoin investment this year was only 1.1 percent. Yes, the company’s average BTC purchase price is still under $30,000, but the figure has been rising quite sloppily in 2021.
A breakdown of MicroStrategy’s Bitcoin investment performance by year
We believe that the idea of the Coinbase cryptocurrency exchange will not only attract new users to the platform, but will also tell the world about the benefits of decentralised finance. Such services allow you to get more than most overseas banks, and there is no risk of volatility when working with stablcoins. So it's a product that's sure to find its user.
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