Categories: Crypto NewsNews

Centralized crypto lenders cut rates as markets fall

Published by
Nonhlanhla P Dube

The yield rates offered by crypto yield services have dropped significantly. Circle, the stablecoin USDC’s issuer, used to provide rates ranging from 6 to 8 % APY for terms ranging from one to twelve months. They do, however, now provide a dividend rate of 0.5 % for terms of any length.

Crypto.com has likewise reduced its dividend rates. The precise rates are determined by the coin and the amount of $CRO staked. Both BTC and ETH might have yield rates as low as 0.2 %. Crypto.com also recently reduced the rewards on its prepaid VISA cards, leading the value of its native coin, CRO, to plummet dramatically.

Reduced yield rates are raising significant anxiety about the viability of yield platforms.

Circle faces solvency concerns

The poor yield rates come at a time when there are already concerns about Circle’s viability. Davidson, a crypto trader, says Circle, according to Davidson, is on the approach to bankruptcy. The assertions were made based on a recent SPAC IPO filing that revealed Circle had just lost money. He also alleged that many of Circle’s positions may have been exposed to corporations like 3AC and BlockFI, which explains their declining interest rates.

Reggie Middleton, a peer-to-peer capital market developer, questioned Circle’s capacity to meet yield requirements as well.

Circle CEO Jeremy Allaire spoke out in defence of his platform. He reiterated that Circle is in the best position it has ever been in. He stated that because the Circle Yield is regulated and over-collateralized, their platform has had no problems.

Centralized yield platforms being examined

Following the failure of several centralized exchanges and yield platforms, there have been numerous concerns raised regarding their financial soundness.

Yesterday, Voyager suspended all of its services after reporting that it has significant exposure to the crypto hedge fund 3AC, which had recently gone bankrupt. Vauld, situated in Singapore, likewise ceased operations, citing market difficulties. Celsius and BlockFi both sustained significant losses during the bear market.

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Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube
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