The top US crypto exchange Coinbase is partnering with MakerDAO in a custody deal nearly doubling the exchange’s US Dollar Coin (USDC) holdings.
Under the agreement, MakerDAO, the decentralized autonomous organization (DAO) behind the stablecoin DAI, will deposit up to $1.6 billion of its USDC holdings with Coinbase Prime.
When in Coinbase’s custody, MakerDAO will earn up to 1.5% rewards on the USDC, a dollar-pegged Ethereum (ETH)-based stablecoin. MakerDAO will not have to pay custody fees. According to a recent poll, the deal was supported by more than 75% of the MakerDAO community.
Coinbase says prior to the deal it held $1.7 billion worth of USDC on behalf of customers. MakerDAO’s custody deal will nearly double that. The company also says the deal marks the first time its USDC rewards program will enlist an institutional client.
Coinbase CEO Brian Armstrong says,
“Great to see Coinbase Prime providing custody to DAOs like MakerDAO and a great way to keep supporting USDC as well. We’re excited to work with more DAOs over time.”
In 2018, Coinbase participated in the creation of USDC by co-founding the consortium Centre with the peer-to-peer payments technology company Circle.
The company says,
“Coinbase believes stablecoins will be part of the solution for creating an open financial system that is both more efficient and more equitable. We co-founded Centre to invest in the creation of USDC, and since then, it has become the second-largest stablecoin by market capitalization. We firmly believe that USDC will be a key component of a new financial paradigm, as it helps to bridge the gap between the worlds of crypto and fiat.”
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