US cryptocurrency exchange Coinbase is increasing its offerings of decentralised finance (DeFi) products, although the latest launch will be unavailable to consumers in North America.
Coinbase announced on December 9 that it will be offering DeFi yields to “eligible customers” in over 70 countries. Presently only the MakerDAO’s DAI stablecoin will get the DeFi yield product, with eligible users being able to receive DAI yields directly from the Coinbase app and website, according to the statement.
In early September, the Securities and Exchange Commission threatened legal action against Coinbase for its intended Lend service, effectively killing the company’s ambitions for DeFi in the United States. The regulator raised an objection to Lend, which would have allowed investors to earn 4% APY on USDC.
“We still do not have clarity on why our product wasn’t allowed to proceed,” Coinbase Chief Financial Officer Alesia Haas said during her congressional hearing this week.
The yields on DAI will be generated by Coinbase with the DeFi lending protocol Compound Finance. Annual percentage yields will fluctuate and will be determined by Compound’s rates. In October, the APY for supplying DAI varied between 2.83% and 5.39%, according to Coinbase. The APY for DAI on Compound sits at 3.33% at the time of writing.
Coinbase did not specify what fees or commissions it would charge on the yields, but it did state that it would cover the gas costs. However, the platform warned of the potential losses, but over-collateralisation makes this improbable.
Users in the United Kingdom, Germany, Spain, and other countries can access DeFi yields. Coinbase plans to expand its DeFi products in markets where these activities are still unrestricted or unregulated.
“Today’s launch is just the beginning — we are continuing to explore ways to allow our customers to use a wider variety of assets and a greater number of DeFi protocols,” stated Coinbase.