Coinbase says it has put on hold plans to launch a relatively high-yield stablecoin savings product due to regulatory concerns.
The cryptocurrency exchange says regulatory uncertainty motivated the decision to scrap the program, which would have generated 4% annual percentage yield (APY) on Coinbase’s dollar-pegged stablecoin USD Coin (USDC).
“As we continue our work to seek regulatory clarity for the crypto industry as a whole, we’ve made the difficult decision not to launch the USDC APY program announced below.”
Coinbase, which had a waitlist of potential investors for the product, says hundreds of thousands had shown interest.
“We have also discontinued the waitlist for this program as we turn our work to what comes next. We had hundreds of thousands of customers from across the country sign up and we want to thank you all for your interest.”
The crypto exchange’s decision to drop the high-yielding stablecoin savings program comes less than two weeks after Coinbase CEO Brian Armstrong revealed that the U.S. Securities and Exchange Commission (SEC) had threatened to sue over the USDC APY program after deeming it a security.
Armstrong added that the SEC had refused to provide regulatory guidance in writing and accused the regulator of “engaging in intimidation tactics behind closed doors.”
“We’re being threatened with legal action before a single bit of actual guidance has been given to the industry on these products.
If we end up in court, we may finally get the regulatory clarity the SEC refuses to provide. But regulation by litigation should be the last resort for the SEC, not the first.”
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