A new digital banking product called Juno will pay interest on USDC deposits, among other features that make it ripe for the crypto age.
Launching soon, the project is the brainchild of the creators of a lending protocol called Nuo.
USDC holders will get a 5.5 interest rate, which is far higher than you can find on most savings accounts at this point. The rate, in fact, is competitive with certificates of deposit.
Combined with Juno’s goal for a friendly user interface, the product is an overall effort to spurring mass adoption. As Juno’s Varun Deshpande told Coindesk:
“What Juno will be able to add is a very simple user experience which is required for retail adoption. If there’s anything that can take DeFi [decentralized finance] or crypto mainstream, it would be an interest rate.”
Juno raised $3 million from PolyChain, a crypto-centric investing firm, as well as Sequoia Capital.
The company is one of many serious business efforts to spread adoption of cryptocurrencies. Other projects that come to mind include Edge wallet and Ambo, a mobile wallet acquired t his year by MyCrypto.com.
The Nuo protocol reportedly supports around $25 million in loans at present time. It acts as a way for people to earn money lending in cryptocurrency.
The USDC interest rate brings to mind the MakerDAO CDP system, which allows a user to lock up Ethereum and take out a stablecoin.
In addition that, a Dai (the MakerDAO stablecoin that results from an Ethereum smart contract) can be locked up at a place like Compound.finance, where traders will borrow it at interest.
Many of these products were not possible before blockchain.
Although, blockchain is not to credit for the advent of the interest-bearing account. However, it’s crypto’s very volatility that affords companies like Juno the freedom to offer a rate of over 5% on deposits.
Generally, this interest rate would cover many of the fees associated with acquiring and holding cryptocurrency, and even liquiditating it later on.
By holding their money in stablecoins, users can interact with blockchain while foregoing a large part of the risk associated.
Gradually, more and more new services will emerge offering everyday people access to markets they couldn’t have dreamed of before. As blockchain takes over the important institutions, middlemen disappear, and banks like Juno will emerge to fill the gaps created by progress.