Coinbase has announced a new feature that allows users to earn yields on their USDC holdings by integrating the Morpho lending protocol. This initiative marks a significant step into decentralized finance (DeFi) for the exchange, as users can lend their USDC directly through the Coinbase app, avoiding third-party platforms. While Coinbase already offers rewards of up to 4.5% APY for USDC holdings, the new DeFi option could yield up to 10.8%. Morpho, with over $8.3 billion in total value locked, represents a growing interest in on-chain lending. However, Coinbase advises users to understand the associated lending risks. This integration coincides with increasing interest in DeFi among Americans, supported by a more favorable regulatory environment. Furthermore, the adoption of stablecoins continues to rise, surpassing a circulating supply of $300 billion, sparking discussions around their impact on traditional banking.

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