Coinbase plans to launch product of interest after SEC CEO comments

Coinbase plans to launch product of interest after SEC CEO comments

Two weeks after CEO Brian Armstrong took to Twitter for a lack of guidance on this from the SEC, Coinbase decided to halt plans to launch an interest-generating product.

The new public cryptocurrency services company said in a blog update on Friday that it will not be launching Coinbase Lend, which allows users to earn a 4% annual percentage return on the stable USDC in allowing users to lend these funds to borrowers verified by Coinbase. will allow. Coinbase has also closed its wait list for the product.

Coinbase shares fell more than 5% on Monday. The stock, which tracks cryptocurrency prices because its earnings are so closely tied to trading, was also rocked by a sell-off in the larger crypto market. The price of bitcoin fell 10% on Monday.

“We have hundreds of thousands of registered customers across the country and we want to thank you all for your interest,” the post said. “We will never stop looking for ways to deliver innovative and reliable programs and products to our customers. “

A Coinbase spokesperson declined to comment beyond the content of the blog post. The SEC did not immediately respond to a request for comment.

On September 7, Armstrong suggested in a storm of tweets that the Securities and Exchange Commission was vague and reluctant to provide advice and clarification to Coinbase, which planned to launch the interest-generating product this month and then release it. move in October. Delayed and made serious efforts to have an open dialogue with Washington.

SEC Chairman Gary Gensler said last week that the agency was closely monitoring crypto-related assets to determine if they fell under securities laws and was not hiding its interest in the growing regulation of space. .

Some investors have likened the product offered by Coinbase to a regular bond, which would then subject it to SEC oversight.

Investor uncertainty over the regulation of stablecoins has intensified in recent weeks. Coinbase’s announcement coincides with a New York Times report released on Friday that the Financial Stability Oversight Council could designate stablecoins like large banks as systematically risky, forcing them and their operators to comply with regulatory requirements and to close scrutiny. subject to increase.

Stablecoins are digital currencies designed to be less volatile than other cryptocurrencies by pegging their market capitalization to an external asset such as the US dollar. They have become increasingly popular this year to give way to the increasingly popular and complex decentralized finance business, or DeFi.

The president’s financial markets task force is also working on a report on stablecoins, with the Federal Reserve due to release a paper on central bank digital currencies this month that could address the risks posed by stablecoins.

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