Coinbase will suspend USDC rewards for free users starting on the 15th and transition them to a benefit exclusive to its paid subscription service, Coinbase One. Previously available to everyone, USDC rewards will now be available only to subscribers paying a monthly fee of $4.99, earning a 4% annual reward.
Coinbase has reported a significant increase in its USDC holdings this year, with USDC balances on its platform reaching approximately $9 billion as of Q3, a 90% increase year-over-year. The company attributed this increase to its USDC rewards program and expanded service integrations. Coinbase shares revenue with Circle, the USDC issuer, and a portion of the interest earned on the reserves is used to fund rewards.
However, with the Federal Reserve's three rate cuts this year putting pressure on stablecoin reserve revenue, Coinbase is seen as restructuring its reward structure. This marks the first time the company has completely discontinued USDC rewards for free users, and the company appears to be using this change to strengthen its revenue structure, which relies on a subscription model.
Coinbase announced a livestream of a "system update" scheduled for the 17th, but did not disclose specific details. Market interest is growing, fueled by recent leaks about feature development.
