Stablecoins, such as the USD Coin (USDC), are gaining more and more attention. Their popularity is further fueled by the engaging statements from Circle Internet Financial Ltd., one of the leading companies in the crypto world and the one who is behind USDC. According to Circle, investors can earn as much as 7% yearly in USDC, which is ten times higher than the profit on a 1-year Treasury bill. Obviously, such an offer is very attractive to investors, especially to those who are enraptured with the big gains in the crypto market. Aside from that, Tether (USDT) and USD Coin (USDC) are more stable than other cryptocurrencies who are prone to strong price fluctuations.
John Griffin, a professor at the University of Texas, likened investments in Stablecoins as putting money in a bank.
Circle's program works as follows: when investors open a "digital-dollar account", the money will be converted into USDC and interest is paid in US DC. Returns are generated by Circle lending digital dollars to a network of institutional investors who are willing to pay the interest rate for access to additional funds.
Circle CEO Jeremy Allaire said the service will be available first in the United States and Switzerland.
Other Stablecoin providers are posting similar offers. On May 26, Gemini announced that investors can get up to 7.4% profit yearly through a program called Gemini Earn. The Gemini token is also pegged to the dollar, and its reserves are held with State Street Bank and Trust, the largest financial custodian in the world.
