Best USDC Lending Platforms

Live USDC lending rates from the top lending platforms
Published: June 14, 2023   |   Last Updated: April 4, 2025
Written By:
Archie Keshan
Archie Keshan
Milk Road Writer
Edited By:
Grayson Carter
Grayson Carter
Content Editor

USDC Interest Rates

Key Takeaways

  • USDC is a stablecoin designed to be worth exactly $1 US dollar.
  • Lending USDC allows you to put this asset to work with minimal risk compared to trading it for more volatile cryptocurrencies.
  • As demand for stablecoins increases due to the rise of DeFi, USDC interest rates (USDC yields) are expected to go up even more.

How To Earn Interest By Lending USDC

When it comes to crypto assets, there are tons of coins and tokens on the market to choose from. In addition to staples like Bitcoin and thousands of altcoins, multiple stablecoins have been added to the crypto ecosystem over the years. While most people are familiar with altcoins — which are categorized as any cryptocurrency other than Bitcoin — stablecoins are another story.

Not every crypto user is familiar with what a stablecoin is or what it does. The good news is, though, that there isn’t a huge learning curve to get up to speed on stablecoins. In fact, the idea behind stablecoins is pretty simple. A stablecoin is simply a crypto coin whose price tends to stay “stable” in any type of market. It is essentially pegged to the US dollar (some even call it the “digital dollar”).

As with other types of stablecoins, USDC is designed to stay at a price of exactly $1 US dollar. Circle, the company behind this digital dollar, maintains a site dedicated to explaining why USDC will always be worth $1. For all the skeptics out there, USDC is backed by both large cash reserves and short-dated US treasuries.

With the price remaining stable at $1 US dollar, there isn’t much money to be made by trading USDC (or any stablecoins for that matter). Yet, USDC holders still have the opportunity to make money through other means, like lending it to borrowers in return for interest.

What Is USDC Lending?

While USDC lending falls outside of the obvious banking system that we’re all used to, the parallels are pretty clear. Rather than lending traditional fiat currency, the entire focus is on letting others borrow USDC.

How Does USDC Lending Work?

There are two primary ways to accomplish USDC lending: through CeFi (centralized finance) and DeFi (decentralized finance) methods.

The CeFi path is what most will select for its ease of getting started: you are essentially letting the provider tap into your USDC so they can in turn lend it out to other people. Since they’re doing most of the heavy lifting internally, you don’t get all of the interest.

With decentralized USDC lending, the process is simple — at least on the user’s end. In order to lend USDC tokens to a borrower, you simply have to connect your wallet to, and interact with, an existing DeFi lending platform, like Aave or Compound. Many of these protocols already have the code built in that allows you to swap coins, earn rewards, or lend tokens.

CeFi USDC Lending

Let’s dive a little deeper into the details of lending USDC. CeFi USDC lending is typically the easier path because a centralized provider is handling most of the details in the background on your behalf. For beginners, starting with CeFi USDC lending makes sense.

There are plenty of CeFi lending platforms out there (probably too many). To save you the trouble of extensive research, we recommend using either Nexo or SALT to go about your lending business.

Check the table below for a quick rundown of the pros and cons.

Pros And Cons Of CeFi USDC Lending

Pros

  • Simple to use
  • Easier reporting
  • Quick deposits/withdrawals
  • No smart contracts needed

Cons

  • Dependent on the platform
  • Higher fees
  • More verification required
  • Lower APY

Pros of CeFi USDC Lending

Simple to use

If you’re connecting to a centralized platform, the lending process is already built in. That’s a huge plus for beginner users, as the learning curve isn’t steep.

Easier reporting

Fewer details means that it’s easier to track transactions for tax reporting later. The complicated tax components attached to crypto are a big deterrent for many users, so simplified reporting can be a big benefit.

Quick deposits and withdrawals

Many centralized platform even allow for transfers to or from debit cards versus traditional bank accounts. This removes yet another laborious step to withdraw or deposit USDC. Plus, some exchanges offer rewards for using their crypto debit cards, which means you can earn while spending your crypto gains.

No smart contract knowledge required

Since the platform is doing the work, there is no need for the user to understand smart contracts – or do anything extra in that regard.

Cons Of CeFi USDC Lending

Custody is given to the centralized platform

In order to use CeFi for USDC lending, you have to give your crypto over to the lending platform. This removes the crypto tokens or coins from your control, which may not be ideal for your situation. What if the platform fails or freezes funds? We’ve seen it a few times before (*cough cough* *FTX* *cough* *cough*).

Higher verification required

Centralized platforms have to follow regulations in order to allow U.S.-based traders, which means they need to keep more information about your legal identity. In turn, you’ll need to offer up a number of documents or types of information to verify your identity. This may include a copy of your driver’s license, allowing access to your credit report, and/or communicating with someone at the platform to verify who you are.

Risk of collapse

While no one expects an exchange / platform to completely shut down, it’s happened before — and there’s always a risk that it may happen again, especially if those running the company are making risky decisions with the crypto they have in their custody. And, because you’re giving up custody to the platform, it means that your tokens may be at risk of going down with the proverbial ship, should that take place. That’s why it’s important to choose a regulated financial institution you trust.

Higher fees

Convenience always carries a price, and that price is going to be higher fees. These fees vary widely depending on the platform.

Top USDC Lending Platforms (CeFi)

Nexo

Best For Daily Payments
On Nexo’s site
Review
4.3
Tokens Available
$BTC, $ETH, $SOL, $XRP, $USDT, $USDC, $NEXO and many more
APY Range
Up to 16%
Where Available
Europe, Australia, New Zealand, Middle East, UK

With over 5 million users worldwide, Nexo is one of the biggest crypto lending platforms and provides some of the highest returns (called APY, or annual percentage yield) on loaned funds.

To promote the use of its platform, Nexo encourages transactions that use its native $NEXO tokens and rewards users accordingly: If you opt to receive your returns in $NEXO tokens rather than in whatever token you originally lent out, the platform gives you an extra 2% bonus.

  • Holding $NEXO tokens = APY bonus
  • Daily interest payouts
  • Nexo provides daily proof of reserves, a snapshot of their money situation and ability to pay back debts.

SALT

On SALT’s site
Review
4.4
Tokens Available
$BTC, $ETH, $LTC & MORE
APY Range
Up to 15%
Where Available
Worldwide

Specialised in Bitcoin-based lending and borrowing, SALT is a platform that lets you lend / borrow cash or other cryptocurrencies using your Bitcoin as collateral.

Been in the space since 2016, individuals and business alike have trusted SALT to go about their $BTC lending and borrowing business.

  • The original provider of Bitcoin-backed loans
  • Attractive APYs
  • Wide range of assets

DeFi USDC Lending

If you wish to keep control of your tokens, you don’t have to use centralized platforms. You can always lend your USDC with DeFi protocols, like Aave or Compound.

DeFi lending platforms are a bit more hands on, just given the nature of cryptocurrency and the blockchain in general. For example, did you know that one blockchain technology doesn’t talk to another natively? This limitation means that if you have a token that’s native to one blockchain, you’ll have to “wrap” it in order to take it elsewhere.

However, there are benefits to DeFi tokens to lend your tokens. For starters, one major benefit of using a DeFi lending platform is that it won’t come with strict Know Your Customer (KYC) requirements (which is common while lending fiat currencies). Plus, smart contracts do all of the heavy lifting, and you may find better APYs compared to the CeFi world.

The downside is that you’ll have to do most of the heavy lifting rather than letting the centralized platform do all of the work. In addition, smart contracts aren’t perfect, and you may not get everything you need to handle your reporting requirements.

Pros And Cons Of DeFi USDC Lending

Pros

  • More flexibility and customization
  • Fewer verification requirements
  • Lower fees
  • Keep custody of crypto

Cons

  • Complex
  • Less technical support
  • Smart contracts can be buggy/hacked
  • Multiple transfers can add hidden fees

Pros Of DeFi USDC Lending

More flexibility and customization

You’re in the driver’s seat when using a DeFi lending platform. There is more control on the user’s end when compared to the centralized platforms, which are typically limited in both functionality and customization opportunities.

Fewer verification requirements

There typically aren’t any KYC requirements at all, which means there’s no documentation to provide on your part. Removing the frustrating KYC requirements from the process can be a huge plus for users who are conscious about privacy or security. It can also benefit users who don’t want to have to wait for the verification process, which can take weeks or more with some centralized platforms.

Lower fees

Since you’re handling more of the details yourself, the decentralized protocols tend to have much lower fees. Lower fees = less likely to eat away at your profits.

Crypto custody is retained

Unlike a CeFi platform, you retain crypto custody when you use a DeFi one. Your crypto remains in your wallet, and you can do with it what you see fit. Ultimate power, ultimate control.

Cons Of DeFi USDC Lending

More complex

If you’re a beginner and want something a bit more direct, it may benefit you to stick with CeFi USDC lending. There’s a steeper learning curve with DeFi platforms, and it may not be easy to navigate for new crypto users.

Smart contracts have their dark side

Nothing is completely secure, and smart contracts can be manipulated by bad actors or just be buggy in general.

Wrapping is often required

If you aren’t used to swapping one crypto for another in order to make trades, DeFi is going to have a bit of a learning curve to reach your goals. In order to lend USDC, you need to buy USDC first (you can do this directly on Milk Road Swap!).

Top USDC Lending Platforms (DeFi)

Aave

Best For Blockchain & Token Options
On Aave’s site
Review
4.6
Tokens Available
$ETH, $WBTC, $USDT, $USDC, $cbBTC, $AAVE and many more
APY Range
Up to 10%
Where Available
Worldwide

Similar to Compound, Aave’s DeFi platform uses a series of smart contracts that allow lending and borrowing. Where Aave differs from Compound is in its range of blockchains and tokens; Aave supports 13 blockchains compared to the 7 on Compound. Aave also offers more token choices for lenders and borrowers.

DeFi without risk? There’s no such thing. But Aave offers a Safety Module, an investor-funded insurance pool that insures against shortfall events. For example, smart-contract bugs could cause lenders to lose money. Losses can also occur when the market moves quickly, slowing or preventing collateral liquidations.

  • Aave supports 13 different blockchains.
  • Easily swap cryptocurrencies on Aave to capture a better rates; if you see a chance to lend / borrow with more competitive rates, you can exchange your tokens for those tokens without leaving Aave.
  • Biggest decentralized lending & borrowing platform in crypto

Compound

On Compound’s site
Review
3.2
Tokens Available
$ETH, $WBTC, $USDT, $USDC, $COMP and more
APY Range
Up to 9%-10%
Where Available
Worldwide

Compound Finance is the OG lending & borrowing platform in the DeFi space. It’s been around way before Aave was even born. Lending & borrowing rates vary based on demand. The platform supports lending & borrowing in $ETH, $WBTC, $USDC, and several other major cryptocurrencies.

• One of the OG platforms in the crypto space
• Occasionally provides more competitive rates on stablecoins
• Clean interface

Final Thoughts On Lending USDC

Ultimately, lending USDC is just one strategy of many when it comes to handling this coin — but it’s a great way to earn interest on a crypto that doesn’t offer the same volatility that many investors rely on to make profits.

And remember that just because you decide to lend USDC today doesn’t mean that it has to become a long-term strategy. You can always try it out, see if the returns work for you, and re-evaluate at a later time whether you move forward or not. Like most things in crypto, USDC lending is a concept that will grow as the demand for stablecoins increases along with other market shifts.

Frequently Asked Questions

USDC is considered to be quite safe as it’s backed by both large cash reserves and short-dated US treasuries.

Yes, there are multiple platforms (such as Nexo or SALT) on which you can lend and borrow USDC (along with other crypto assets).

If you aren’t planning to use your USDC to move between cryptocurrencies, lending it out to other people is a great idea.

You don’t have to lend your entire amount of USDC; a portion can be left aside for future use while you lend the rest.

One of the best CeFi platforms to lend USDC is Nexo.

If you’re looking for a decentralized option, Aave is our go-to platform.

Nothing in the world of crypto is completely free of risks.

For example, if you use a centralized platform to lend USDC, and that platform suddenly shuts down, your USDC can be in danger.

If you use DeFi lending protocols to manage the lending, there are smart contract risks along with it.

The USDC yields vary depending on platform.

The USDC interest rates typically range from 4% to 12% APY, but this is subject to change — especially as the demand for stablecoins continues to increase.

If you are making money on your stablecoin (such as USDC) investments, there is a good chance you will owe taxes. That’s because the IRS sees crypto like any other source of income, and if you’re earning on it, you’ll owe taxes on it.

Make sure that you seek professional advice from a tax professional before filing any tax return to avoid exposure to unexpected liability.

Archie Keshan
Archie Keshan
Milk Road Writer
Archie has been active in the crypto space for over 3 years, dedicating his extensive research and writing skills to simplify the crypto world. Whether it’s technical writing, news articles, or blog posts, his focus is always on simplifying the complexities of blockchain for everyone.

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