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Circle’s Digital Dollar High Yield Account will enable USDC holders to deposit digital dollars to earn 4% APY on open term and 7% on twelve-month fixed-term deposits.
The short and medium-term yield accounts will empower businesses and financial institutions to leverage the power of digital dollar stable coins to earn above-average yields.
Circle can provide this return by its partnership with institutional crypto lender Genesis Capital.
Jeremy Allaire, the Circle CEO, expressed: “With our High-Yield Accounts, an internet business can earn a yield on working capital held in digital dollars for every day it isn’t put to use. Additionally, we want to give financial institutions who are bold enough to venture into the world of crypto assets the ability to generate higher yields for holding digital dollars than they currently could when holding ‘physical’ US dollars.”
This high-yield interest account has been around for some time now. They are targeting treasurers and institutional investors. Thus, providing them with a novel way to allocate capital in an asset class that has a different risk profile than that is otherwise found in the traditional money and capital market.
High-yield interest accounts are making between 4% and 7% per annum, which is high when compared to the annualized returns of major traditional asset classes. However, these allocations do have a risk. Entering into the digital currency lending markets using these accounts comes with credit risk, market, and also operational risk. This can also lead to loss of principle, and therefore it is important to carefully vet the options before comparison of risk-adjusted payments.
Circle opines that financial institutions looking to balance their assets and liabilities by depositing digital dollars in an open term High-Yield account will be an exciting new avenue to manage the interest rate gap.
Circle Accounts are facilitated for businesses and financial institutions from across the world. Still, they are rolling out to a restricted set of countries to start for High Yield Accounts. Those who are interested in yield generating accounts will like better options.
Those who are looking for more earnings should check what Alex Mashinsky recently expressed: “There has never been a better time to transfer stable coins like USDC, USDT, PAX, and GUSD to Celsius Network. Earn 8.8% & get up to $600 as a Thank You from us for growing your bags & our community. Earn Yield Take a 1% Loan or Swap, and you end with more coins and no fees at Celsius.”
