Coinbase will let users earn interest on crypto but not in the US

Coinbase has announced that it’ll let users earn interest on their cryptocurrency by lending it to a decentralized finance app called Compound (via Bloomberg). The program isn’t currently available to US users, though, after plans for a similar feature got the company into trouble with the Securities and Exchange Commission.

Coinbase says that customers in over 70 countries will be able to lend their Dai, a stablecoin whose value is tied to the US dollar, to borrowers from within its app. The process works using a protocol called Compound, which programmatically pools money from lenders and collects interest on that money from borrowers. Coinbase’s pitch is that it makes the system more user-friendly — lending through Compound usually involves receiving multiple tokens when you make a deposit and paying transaction fees whenever you put crypto in or take it out (Coinbase says it’ll be covering these fees for its users).

The program is similar to Coinbase Lend, which the company announced in June but canceled in September after the SEC threatened to sue the company, saying that the feature would count as a security. Lend would have allowed users to earn interest on USDC, another stablecoin, though users would’ve been loaning it directly to Coinbase to manage instead of an outside protocol.

Coinbase also promised that you’d get whatever money you put into Lend back, but the company isn’t making any such guarantees with this new program. It also warns users that losses are possible and make sure to point out that the interest rates are variable — Compound’s rates for DAI fluctuated between 2.83 and 5.39 percent throughout October, according to Coinbase.