How to earn interest on USDC

Learn how to passively grow USDC holdings

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Passive income is a central part of any solid investment strategy. The idea of putting digital assets to work has seen a serious uptick in activity within the cryptocurrency industry, and there is now a multitude of companies that offer passive income opportunities.

USDC, or USD Coin, is one of the most popular stablecoins in the crypto market. As the name suggests, USDC is pegged 1:1 with the US dollar. It has become a central component for investors looking to diversify and earn passive income without worrying about the volatility of cryptocurrency markets.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.

Earn interest on USDC

The popularity of USDC means it now holds one of the largest market capitalisations of any cryptocurrency. As a result, there are several cryptocurrency exchanges, lending platforms and decentralised finance (DeFi) applications that offer passive income opportunities for USDC holders. To earn interest on most applications, users deposit funds and accrue interest. This can either require funds to be locked up for a period of time during which they cannot be withdrawn (like a term deposit) or placed into a 'flexible' account which allows funds to be withdrawn at any time (although these types of accounts typically have lower interest rates as a result). In return for lending their funds, users are rewarded with interest, similar to how banks give interest on cash deposits.

Earn interest on USDC through an exchange

Earning interest on a centralised cryptocurrency exchange is a relatively straightforward process, with all exchanges requiring a similar set of steps. Once an account has been created with a chosen exchange, deposit USDC and select your preferred interest-earning product. This may involve locking USDC for a set period of time.

The upside of using a centralised exchange is that it becomes a one-stop shop for all cryptocurrency needs. For the larger exchanges, trading, staking, lending and borrowing can all be completed via a single platform. Here are a few exchange options to consider:

    • Binance. Binance has become the world's most popular exchange, hosting one of the widest ranges of cryptocurrencies and platform features. For most cryptocurrencies, users have an option of several passive income products.
      Use our in-depth Binance guide to create an account. Once logged in, click on the "Finance" tab followed by "Binance Earn". Search for USDC products to see the options that are available. Transfer USDC funds into a product to start earning interest.

      Binance Earn page

    • Since launching in 2016, has developed into a leading cryptocurrency exchange that offers multiple interest-earning products. After creating a account, click on "Products" and "Crypto Earn" to see the rates of different products. Use our in-depth guide to start using the platform and begin earning interest on USDC holdings.

Crypto Earn page

    • KuCoin. KuCoin is a slightly smaller cryptocurrency exchange, but one that still offers several interest-earning products through its platform. The cryptocurrency exchange offers a slightly different interest-earning structure for most products. Users can choose whether to lend USDC holdings for 7, 14 or 28 days. The 28-day lock-in period usually offers the highest APY rates. However, rates on the platform are constantly fluctuating. Click on "Finance" and "Crypto Lending" to see the rates on offer. Use our in-depth KuCoin guide to start using their platform.

KuCoin page

As with all investment options, it is important to consider both the potential upsides and downsides. Here are some of the advantages and disadvantages of using a cryptocurrency exchange to earn interest on USDC holdings.


  • One-stop shop. Cryptocurrency exchanges offer many services on top of lending, such as trading, staking and borrowing. Investors can use the platforms for cryptocurrency services other than just earning interest.
  • Competitive rates. There are many cryptocurrency exchanges on the market that offer interest-earning products for USDC. This means interest rates for exchanges are often very competitive.


  • Not your keys, not your coins. When using centralised cryptocurrency exchanges, you do not remain the custodian of your funds. If there are issues with the platform, whether hacks or regulatory crackdowns, there is a risk of funds being lost, even if only temporarily. For those interested in self-custody, a DeFi lending protocol may be more suitable.
  • Varying rates. As exemplified by KuCoin, cryptocurrency exchanges will offer both fixed and dynamic rates. Often rates change on a daily or weekly basis. This can mean you don't always know what interest you are earning. Accounts might need frequent monitoring.

Earn interest on USDC through a lending service

The boom in cryptocurrency markets over the past couple of years has resulted in a flock of new investors. To accommodate the influx, many new financial companies have been established that are focused on offering enticing passive income opportunities. They bring traditional business models to this new asset class, and in doing so, have built easy-to-use and beginner-friendly applications. Alongside intuitive, familiar interfaces, many offer great interest-earning potential.

There are now dozens of financial platforms trailblazing the way for investors looking to earn interest on idle crypto holdings. These companies take assets, such as USDC, and lend them to third-party individuals and organisations within the cryptocurrency industry. The interest and returns gathered for doing so are then handed back to investors. Here are a few examples of lending services currently available on the market:

    • Celsius Network. The Celsius Network is a lending and borrowing platform that focuses on offering crypto investors premium interest rates for idle cryptocurrency assets. Alongside lending assets, users can also borrow funds and leverage cryptocurrency assets as collateral. Note: The platform offers different rates depending on your country of origin and whether you hold its native token, CEL. Use our in-depth Celsius Network guide to learn more and get started.

Celsius Network page

    • BlockFi. Like Celsius Network, BlockFi is another lending and borrowing platform that also bridges out to cryptocurrency trading. Users can earn interest on USDC holdings by opening a BlockFi interest account. It's important to note that to access BlockFi, you will need to complete their full KYC process. Once registered and verified, USDC can be deposited onto the platform to begin earning interest.
    • Nexo. Managing one of the largest portfolios within the digital asset space, Nexo helps users to "unlock the power of their crypto". The feature-full platform offers users the opportunity to buy, earn, borrow, exchange, and buy goods and services using a crypto card. Interest-earning rates are higher when holding the native NEXO token. Use our in-depth Nexo guide to create your account and start earning interest.

Nexo page

Lending services providers offer unique features in comparison to cryptocurrency exchanges and DeFi applications. Make sure to evaluate both the pros and cons before making an investment decision.


  • High-interest rates. Lending platforms are becoming more common in the cryptocurrency industry. With a large number of companies offering services, interest rates are high and competitive. Given their primary service is lending to third parties, interest rates tend to be higher than those on cryptocurrency exchange sites.
  • Low fees. With a focus on leveraging cryptocurrency funds to generate high profits, centralised lending platforms charge low fees for using their services.


  • Not your keys, not your coins. Like cryptocurrency exchanges, investors forgo custody of cryptocurrency funds when using centralised lending services.
  • Native tokens. Some lending platforms use a native token, increasing regulatory risks and locking certain benefits for token holders.

Earn interest on USDC with DeFi

Decentralised Finance (DeFi) has become a popular sector within the cryptocurrency industry. DeFi applications offer users access to traditional financial services but users remain in control of funds at all times. DeFi applications are usually run by a decentralised network rather than a single entity.

Whether users stake, farm yield, lend or borrow, this unique marketplace has cemented its position within the cryptocurrency industry. On the majority of DeFi applications, a user can lend cryptocurrency funds to the application and become a liquidity provider. Those funds are then used by other investors. In return for lending funds, liquidity providers earn rewards.

Ethereum remains the dominant blockchain within the DeFi sector and is where the majority of DeFi applications exist. However, there are now several competing blockchains, including Binance Smart Chain and Solana, that are developing their own DeFi ecosystems. Although innovating quickly, the most popular DeFi applications still reside on the Ethereum blockchain. A few of these include:

  • Aave. Aave is a decentralised lending and borrowing protocol that is automated by smart contracts. USDC interest rates fluctuate based on user demands.
  • Compound Finance. Compound Finance is another decentralised lending and borrowing platform that focuses on compounding interest returns. All interest returns can be compounded automatically over time – increasing returns.
  • Curve Finance. Curve Finance is a stablecoin-focused decentralised exchange. The platform utilises an automated market maker coupled with user-supplied liquidity to complete exchanges. By targeting stablecoin exchanges, the platform offers minimal slippage and exceptionally low transaction fees.

DeFi continues to be a very experimental ecosystem. As a result, using DeFi applications comes with its own set of risks including rug pulls, impermanent loss and faulty smart contracts. However, DeFi applications also allow users to remain in complete control of funds. There is no need to trust an independent third party. Control remains with the user.


  • Stay in control of your funds. Using a DeFi application requires the use of a Web 3.0 digital wallet. The wallet acts as a bridge between cryptocurrency funds and a DeFi application. When connecting to a DeFi platform, a user always remains the custodian of their own funds.
  • Yield farming. Although some platforms require users to lock up funds, there is the opportunity to divert funds into multiple DeFi protocols in search of the best interest rate return – otherwise known as yield farming. There are DeFi aggregators that automate this process.


  • High fees. Given most of DeFi is built on Ethereum, users may have to accommodate high gas fees when interacting with certain protocols. Gas fees will be correlated to the congestion experienced on the Ethereum blockchain.
  • Experimental. DeFi is still a young sector of the cryptocurrency industry. Many applications are still within the experimental phase. The risks of malfunction are higher when utilising young applications.
  • Impermanent loss. The risk of losing value in comparison to holding cryptocurrencies within a crypto wallet. Learn more about impermanent loss here.

How much interest can I earn with USDC?

Both CeFi and DeFi offer exciting opportunities for those looking to earn interest on their cryptocurrencies. It's important to note the pros and cons of each ecosystem in order to properly assess risks and rewards.

CeFi offers higher rates, but users must renounce custody of their funds and go through KYC processes. For those that are more privacy/anonymity oriented, DeFi gives control back to individual investors, but requires a wider appreciation of the risks involved.

Expected returns from lending USDC tokens will depend on the platform and application chosen. APY rates can range from 1%-2% all the way up to 14%-15%. As USDC remains pegged to the US dollar, unlike other cryptocurrencies, an investor does not have to worry about market volatility affecting USDC's value.

Name Product Loans
Binance Cryptocurrency Exchange
50% LTV ratio
Borrow US$100 minimum
~10% interest rates
Binance is the world’s largest exchange by trading volume. Get started with instant zero fee AUD deposits and withdrawals in Australia, and enjoy low trading fees, a wide selection of cryptocurrencies and 24/7 local customer support. App
50% LTV ratio
Borrow US$250 minimum
8-12% interest rates
Buy 200+ cryptocurrencies, earn up to 14.5% p.a. on holdings, pay with your crypto for cashback at stores, get loans and more with this complete crypto-finance platform.
50% LTV ratio
Borrow USD or stablecoins against your BTC, ETH, LTC and PAXG deposits
Interest rates start from 4.5%
Deposit your cryptocurrency with to earn interest, or take out a cash loan without having to give up your investment
Nexo Cryptocurrency Lending
50% LTV ratio
Low/no minimums for crypto and fiat loans
Interest rates from 5.9%
Borrow and lend fiat, stablecoins or cryptocurrency, with 24/7 customer service and the option of using NEXO tokens for more competitive offers.

Compare up to 4 providers


The cryptocurrency industry is brimming with passive income opportunities. For those looking to earn interest on USDC holdings, there are many user-friendly and intuitive platforms that offer excellent interest-earning products.

An investor will need to make a decision as to whether a centralised cryptocurrency exchange, a lending service or a DeFi protocol is the right decision for them. All 3 offer unique advantages and disadvantages. Before committing funds, complete thorough research on the platform chosen and enjoy putting those idle USDC assets to work.


  • Portfolio growth. By earning interest on idle USDC assets, an investor has the opportunity to further grow a cryptocurrency portfolio.
  • Not correlated with the market. As USDC is a stablecoin, there is no risk of market movement when locking tokens into a platform.


  • Counterparty risk. Many platforms lend out deposited funds to try and create a profit. However, this adds a counterparty risk to the process. Other users and organisations that utilise the funds might become insolvent.
  • Experimental DeFi platforms. DeFi is still a young sector within the cryptocurrency industry. Many applications should still be treated as experimental. Investors should only place funds into DeFi after understanding all of the risks involved.
  • Not your keys, not your coins. To utilise a centralised cryptocurrency exchange or lending platform, a user must relinquish control of cryptocurrency private keys. Trust must be placed in the service provider offering the investment product.
Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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