Why Stablecoin Interest Rates Are So Damn High (2024)

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e=r.searchBoxForm.querySelector("[name=fr]"),n=r.searchBoxForm.querySelector("[name=fr2]");e&&r.config.searchBox&&r.config.searchBox.params&&r.config.searchBox.params.fr&&(e.value=i.searchBox.params.fr,e.disabled=!1),n&&r.config.searchBox&&r.config.searchBox.params&&r.config.searchBox.params.fr2&&(n.value=i.searchBox.params.fr2,n.disabled=!1),r.searchBoxForm.submit()}}),1e3)},r.recognition.onspeechstart=function(){},r.recognition.onspeechend=function(){r.recognition.stop()},r.recognition.onerror=function(){r.speechText&&(r.speechText.innerText=r.i18n.t("search.voice.recognition_error")),r.hideTrending(r),r.showRetryLink(r),r.errorAudio.play()},r.recognition.onaudiostart=function(){r.speechButtonContainer&&r.speechButtonContainer.classList.add("listening")},r.recognition.onaudioend=function(){r.speechButtonContainer&&r.speechButtonContainer.classList.remove("listening")},r.recognition.onsoundstart=function(){r.hideTrending(r),r.noSpeech=!1,r.speechButtonContainer&&(r.speechButtonContainer.classList.remove("listening"),r.speechButtonContainer.classList.add("speaking"))},r.recognition.onsoundend=function(){r.speechButtonContainer&&r.speechButtonContainer.classList.remove("speaking")},r.recognition.onstart=function(){r.recognitionInit(r),r.startRecognition(r)},r.recognition.onend=function(){r.isRecognitionStart=!1,0==r.noSpeech&&""==r.speechResult&&(r.speechText&&(r.speechText.innerText=r.i18n.t("search.voice.recognition_nomatch")),r.hideTrending(r),r.showRetryLink(r),r.errorAudio.play())},document&&document.dispatchEvent&&document.dispatchEvent(new Event("VOICE_JS_READY"))}}o.I18n=m,o.prototype.renderPermissionGuide=function(e){var n='\n

    \n

    \n

    \n

    \n

    \n

    \n

    \n

    '.concat(e.i18n.t("search.voice.permission_title"),'

    \n

    ').concat(e.i18n.t("search.voice.permission_text"),"

    \n

    \n

    \n

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    \n

    \n

    \n

    \n

    \n

    \n \n \n \n \n \n \n

    \n

    \n

    \n \n \n '.concat(e.i18n.t("search.voice.recognition_retry"),'\n

    \n

    \n

    \n

    \n

    \n

    \n ').concat(e.i18n.t("search.voice.trending_title"),'\n \n

    \n

    \n

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e)&&("SpeechGrammarList"in e||"webkitSpeechGrammarList"in e)}}],d=0;d0){var n=e.speechResult.charAt(e.speechResult.length-1);"."!==n&&"?"!==n&&"。"!==n&&"?"!==n||(e.speechResult=e.speechResult.slice(0,-1))}},o.prototype.sendBeacon=function(n,t){var o=e.YAHOO.ULT||{},i=e.YAHOO.SB||{};if(o.beacon_click){var r={_S:i.config.i13n.spaceid,_I:i.config.i13n.pvid,actn:n,sec:"search",slk:t};e.YAHOO.ULT.beacon_click(r)}},o.prototype.ajaxReq=function(t,o){var i,r,a=XMLHttpRequest.DONE||4,s=new XMLHttpRequest;if(n.documentMode&&n.documentMode<10)return(new e.XDomainRequest).onload=function(){try{r=JSON.parse(i),o(r)}catch(e){return}},s.open("GET",t),void s.send();s.onreadystatechange=function(){if(s.readyState===a)if(200===s.status){i=s.responseText;try{r=JSON.parse(i),o(r)}catch(e){return}}else o(r)},s.open("GET",t,!0),s.timeout=1e4,s.send()},e.YAHOO||(e.YAHOO={}),e.YAHOO.Util||(e.YAHOO.Util={}),e.YAHOO.Util.VoiceSearch=o}(window,document)}();var Wn={containerClass:Un.tooltip,textClass:Un.tooltip__text,showClass:Un["tooltip--show"]},Jn=["zh-hant-tw","zh-hant-hk"];ye("ybar-mod-searchbox",(function(e){var n={ybar:document.getElementById("ybar"),searchInput:document.getElementById("ybar-sbq"),buttonBar:document.querySelector(".".concat(Un["sa-btn-bar"])),voiceSearchBtn:document.getElementById("ybar-sbq-voice"),searchForm:document.getElementById("ybar-sf"),searchBoxIcon:document.querySelector(".".concat(Un["searchbox-icon-uh3"])),searchBoxPlaceholder:document.getElementById("ybar-smartphone-searchbox-placeholder"),searchBoxBackButton:document.getElementById("ybar-search-back-btn"),shopsButtonsWrap:document.querySelector(".".concat(Un["shops-buttons"])),categorySelect:document.getElementById("shops-category-select"),selectedMerchantInput:document.getElementById("selected-merchant-input"),selectedMerchantClearButton:document.querySelector(".".concat(Un["selected-merchant-clear-button"])),submitSearchBtn:document.getElementById("ybar-search"),clearSearchBtn:document.getElementById("ybar-sbq-x")};!function(e,n){var t,o,i,r=e.getConfig();if(n.ybar&&"desktop"===r.device&&(null===(t=r.bucketConfig)||void 0===t?void 0:t.highlight_searchassist)&&(null===(o=r.bucketConfig)||void 0===o?void 0:o.overlay_class)){n.ybar.setAttribute("data-ovrly-bkt",r.bucketConfig.overlay_class),null===(i=n.searchForm)||void 0===i||i.classList.add(Un[r.bucketConfig.overlay_class]);var a=document.createElement("div");a.classList.add(Un.overlay,Un[r.bucketConfig.overlay_class]),document.body.appendChild(a),e.onDestroy((function(){document.body.removeChild(a)})),e.addElementListener(n.searchForm,"focusout",(function(e){if(n.searchForm&&n.searchInput){var t=e.relatedTarget;t&&!n.searchForm.contains(t)&&window.YAHOO.SA&&window.YAHOO.SA.apps&&window.YAHOO.SA.apps[0]&&window.YAHOO.SA.apps[0].view.shown&&window.YAHOO.SA.apps[0].view.hide()}}))}}(e,n),Fn(e,n),n.voiceSearchBtn&&function(e,n){var t=e.getConfig(),o=t.locale,i=function(){var e,t;(null===(t=null===(e=window.YAHOO)||void 0===e?void 0:e.Util)||void 0===t?void 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    Why Stablecoin Interest Rates Are So Damn High (2024)

    FAQs

    Why are stablecoin interest rates so high? ›

    When looking at stablecoin interest rates, it is more of a supply/demand equation, where demand constantly exceeds the supply. As a result, people who hold stablecoins can charge premium interest rates, and crypto exchange platforms seeking to attract stablecoin lenders offer high interest rates.

    Why is USDT interest so high? ›

    As investors seek stable assets amidst market volatility, USDT has become an attractive option due to its peg to the US dollar. The increased demand for USDT has led to higher interest rates on these platforms, making it more appealing for investors to hold and earn interest on their USDT holdings.

    Why is USDC yield so high? ›

    It all boils down to the business model implemented by crypto companies. Specifically, they let users lend digital currencies to borrowers willing to pay higher rates, as they can use their crypto as collateral, which one can't do with traditional banks.

    What is the highest interest on stablecoin? ›

    Stablecoin Interest Rates 2024
    ServiceStablecoinInterest Rate
    NexoUSDT16.00% APY
    NexoUSDC14.00% APY
    NexoDAI14.00% APY
    NexoPAX Gold7.00% APY
    12 more rows
    Feb 26, 2024

    How does crypto pay such high interest rates? ›

    Some crypto platforms have raised lots of money from venture capital. This allows them to offer high-interest rates to attract more customers. The platform uses its capital reserves as an advantage over other platforms. This tactic is very effective against platforms without the same resource.

    Why don't stablecoins pay interest? ›

    What about earning interest? Stablecoins generally don't pay interest collected from the reserves to coin holders – the issuers keep it for themselves. Interest payments could raise a question as to whether a stablecoin is a security, significantly reducing its utility for payments and banking.

    Is it safe to leave money in USDT? ›

    USDT is generally considered safe for investment, especially as a means to hedge against the volatility of other cryptocurrencies. However, like any investment, it comes with risks, and it's essential to consider Tether's efforts to maintain transparency and regulatory compliance.

    Should I keep money in USDT? ›

    Global Savings: The USDT is universally acceptable, allowing you to save globally without worrying about time zones or hefty fees and helping you break free from traditional banking boundaries.

    Which is safer, USDT or USDC? ›

    USDC is considered safer than USDT due to its transparency and regulatory compliance, though its value depends on the ability of issuers to maintain the peg.

    What is the downside of USDC? ›

    That being said, stablecoins like USDC are not immune to the risk factors that affect all digital assets and cryptocurrency investments. Even though the price of stablecoins is intended to remain stable, these assets have experienced depegs, hacks, and even total collapse.

    Should I keep my money in USDC? ›

    As a cryptocurrency, USD Coin (USDC) is generally considered risky as an investment. While stablecoins like USDC have less price volatility than other cryptocurrencies, stablecoins may be subject to increased scrutiny by regulatory agencies like the U.S. Securities and Exchange Commission.

    Who pays interest on USDC? ›

    Crypto Lending Companies:

    Borrowers pay interest to borrow the USDC, and the company pays you a portion of that after taken their cut. Some of the more popular companies offering this included BlockFi, Celsius, Coinbase, Gemini, Nexo, and Medici Bank.

    What are the disadvantages of stablecoin? ›

    However, it's also important to consider the potential downsides.
    • Unstable value and algorithm manipulation. ...
    • No established stablecoins in currencies other than the US dollar. ...
    • Centralization. ...
    • Limited acceptance. ...
    • Limited investment opportunities. ...
    • Counterparty risk.
    Nov 20, 2023

    Does a stable coin earn interest? ›

    Additionally, stablecoins offer the chance to earn extra income through staking. This means people and businesses can make their funds work for them by earning interest, making stablecoins not just a safe place to store value but also a way to generate additional earnings.

    Why are stablecoins risky? ›

    Stablecoins are not immune to fluctuations in price, market capitalization and liquidity. A range of factors can cause them to depeg below or above their targeted value. Depegging can trigger individual investment and trading losses, while also pose systemic market risks related to solvency and liquidity.

    Why would anyone invest in a stablecoin? ›

    As the name describes, commodity-backed stablecoins are pegged to the value of commodities like precious metals, industrial metals, oil or real estate. Commodity investors love the option of commodity-backed stablecoins because it allows them to invest in gold without the hassle of sourcing and storing it.

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