In DeFi, lending is currently the biggest trend, with four out of five biggest DeFi projects being lending protocols.
Unfortunately, the exchange recently decided to give up on the program completely, as the regulatory issues with the US authorities continue to grow. That also means that the exchange has given up on its interest-yielding USDC APY feature. While it is still possible that Coinbase might decide to re-start the project someday, it would likely wait until it is certain that the regulators have no problem with such products.
Coinbase Drops the Lending Project
As many already know, Coinbase is a regulated cryptocurrency exchange in the United States, which even went public relatively recently. This means that the platform will not take any risks and make moves that could potentially be seen as controversial, regulatory-unfriendly, or challenging the local authorities.
This has been quite noticeable throughout Coinbase’s lifetime, where its base exchange only ever offered a handful of crypto, compared to the likes of Binance and other major platforms which tend to offer hundreds.
So, when the US SEC announced on September 8th that the exchange could get into trouble and even face a lawsuit if it launches the lending program, the company took this warning extremely seriously. Its Chief Legal Officer, Paul Grewal, revealed that the SEC sent a notice to the platform, officially revealing plans to sue it if it doesn’t discontinue the launch of the feature.
Coinbase to Continue Coming Up with New Features
In its blog post, Coinbase revealed and elaborated on the decision, stating that it will continue its work of pursuing regulatory clarity above all, as this is key for the crypto industry’s survival. The decision to give up on the lending feature and USDC APY feature was not an easy one for the platform, as it also admitted, but at this time, the exchange simply thought that it is for the best.
Obviously, this also means that the waitlist for the program has also been removed completely, and that users will not get an opportunity to lend USDC and earn 4% interest.
The announcement continues to say that the exchange already had hundreds of thousands of users sign up in anticipation of the feature, and there is no doubt that the feature would have been extremely successful, had Coinbase managed to launch it. As things are right now, all that the exchange can do is thank users for their interest, but ultimately, give up on the plans.
Of course, that doesn’t mean that it will stop trying to find new, innovative ways to create interesting and trusted programs and products for the customers, as the blog post also pointed out. So far, it is not known what those new products might include, as the exchange did not go into great detail. But, since Coinbase is an incredibly competitive platform, it is likely already working on something new, or at least planning for it.