At this point Coinbase card has been mentioned several times in this blog, with it even getting tagged as a “must have card“. Many of you have joined the wait list for the card and some of you were even wait listed for 4% APY program that Coinbase was planning on launching. However, after pressure from SEC, on September 17, 2021 Coinbase announced that the 4% APY program would no longer be launched.
Use this link to get $10 in Bitcoin (BTC) when you buy or sell $100 or more in crypto on Coinbase
You can even buy/sell stable coin, like USDC, which are supposed to be 1:1 with USD.
So that kind of halted the whole idea of putting USDC on Coinbase, earning 4% APY on the balance until the debit card is swiped, and then earning 4% cashback on the swiped amount. But there is still a way of going on about it. Sure, this method is a little more convoluted but it earns you more than double APY.
The idea is to somehow get USDC into Celsius where you currently earn 10.02% APY on USDC. The obvious answer is
Then whenever you wish to use the card, you can instantly withdraw required amount of USDC from Celsius to Coinbase. Remember there is no fee for withdrawing from Celsius (they pay the fee!) and you can withdraw as little as $1. In other words, if you withdraw $100, you will get $100 in Coinbase. According to this FAQ in Celsius site, all withdrawals above 150k USD are processed manually and can take up to 24 hours and there is a 600k USD withdrawal limit per 24 hour.
Now the question is how do you cheaply get USDC to Celsius? As I have mentioned in my insane Celsius promo post, if the “gas fee” isn’t terrible, you could just buy USDC for rather low fee within the Celsius app. However there is better fee free route as well. The idea is to use another platform that (a) allows free crypto withdrawal (I have compiled them here) and (b) allows you to buy USDC using cash.
One of the very few platform that check above two criteria is BlockFi. There is no fee in buying USDC in BlockFi. This means, if you deposit $1000, buy $1000 in USDC, and attempt to withdraw $1000 in USDC, your destination will get exactly $1000. However, the catch is that BlockFi only allows one free stablecoin withdrawal per month.
Very recently Gemini started supporting USDC so now we have another alternative as well. Note that buying USDC is subject to as low as 0.25% fee in Gemini. This means, if you deposit $1000, you will only be able to get $977.5 in USDC. Note that Gemini allows up to 10 free withdrawal per month. If 10 withdrawal is more than enough, then you could hold stable coin on Gemini until you want it on Coinbase card. Gemini pays 8% APY on stable coins.
Closing Thoughts
This might be a little too involved for most people. And if you’re spending small chunks, maybe it isn’t even worth doing this. But I know some folks were looking forward to earning 4% APY on USDC until they swipe and earn 4% cashback….well, now you are aware of workarounds.
If you just want to HODL USDC and get interest in it then checkout this post where I talk about various platform that give excellent APY on USDC. Also, Hodlnaut gives 12% APY on USDC.
