Compound has announced a new product called “Treasury Accounts” that allows non-cryptocurrency customers to earn a 4% annual return on fiat deposits. The protocol’s altcoin project, named COMP, increased by 23.4 percent after the announcement.
Altcoin rally with Treasury Accounts announcement
The COMP token, which we mentioned as that it has decreased recently, has increased by 23.4 percent in the last 24 hours. While the asset was traded at $ 280 in this saadollarser yesterday, it rose to the levels of $ 326. It is trading at $325.58 at the time of writing. Among the reasons for the price increase is Compound’s announcement last night targeting traditional businesses and institutions.
What are the features of Compound’s new product?
The product allows customers to earn a fixed 4% APR return on cash deposits without using any cryptocurrency. This is the result of a partnership with Fireblocks and Circle, the crypto custodian that released the USDC stablecoin. According to the announcement, this offer is designed to overcome the complications associated with the use of cryptocurrencies for customers who are not involved in the crypto space.
Many traditional organizations will be able to benefit from this product
Customers only need to send US dollars to start earning a fixed interest rate. While a 4% return is relatively insufficient for DeFi, it’s a relatively higher level than any traditional bank can deliver on their time deposits. Treasury Accounts will automatically convert US dollars to USDC and funds will then be transferred to the Compound Protocol for returns. At the time of the product’s announcement, Compound Strategy Leader Calvin Liu said:
Our vision is for Compound Treasury to become a bridge for non-crypto financial institutions to deliver the core benefits of DeFi to their users.
Liu added that neobanks, fintech firms and other traditional firms can benefit from stablecoin rates of return on the Compound protocol. The service will manage private key management and crypto-to-fiat conversion for customers. In addition, since the interest rate is fixed, customers will not have to suffer from the interest rate volatility in loan protocols.
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