Uphold, a trading platform with about 12 million users, is launching U.S. dollar interest accounts that can earn an APY of up to 5%.
The company’s CEO Simon McLoughlin said the move is geared towards attracting new customers and incentivizing users to hold more capital on the platform.
“Our main goal is just to make Uphold attractive and acquire a ton of new customers, from the mass market,” McLoughlin told The Block. “It’s [also] just a safer way for people to hold dollars on the platform. It’s an insured vehicle.”
Initially, the offering is only available to U.S. users, and the accounts “provide access to FDIC insurance up to $2.5 million for participating funds,” the company said in a statement. Balances under $1,000 will earn 2% interest while balances that exceed $1,000 earn 5%.
McLoughlin said in the U.S. Uphold currently has over 2 million users.
Uphold offering interest accounts paying up to 5% APY is made possible through a partnership with Atomic Brokerage. “We’re not funding it,” said McLoughlin. “The yield is not generated from our balance sheet.”
Instead, Uphold plans to provide the generous APY through a program called Atomic Cash Sweep. “Through Cash Sweep, clients’ funds are deposited into an interest-bearing deposit account at one or more banks, where the funds earn a variable interest rate and are eligible for FDIC insurance coverage,” according to Uphold.
McLoughlin said Uphold is rolling out the new USD interest accounts after customers have overwhelming shown an interest in earning higher yields. “Users tell us that they want more ways to maximize the earning potential of their assets, whether that is crypto or fiat,” said McLoughlin. “Now we are the first major crypto trading platform to embed a brokerage account offering interest on USD.”
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