Coinbase Gambles on Global Growth Amid U.S. Regulatory Uncertainty

Coinbase Global Inc. has introduced a new onchain lending product offering up to 10.8% annual yield on USDC deposits for users in the U.S. (excluding New York), Bermuda, and several other jurisdictions. The product leverages smart contracts to link deposits to active lending markets, providing users with both flexibility and transparency. This move expands Coinbase’s DeFi offerings and aligns with its broader strategy to enhance onchain activity through innovative financial products.

The yield is among the highest currently available in the DeFi space, especially when compared to other platforms. According to a recent analysis of USDC interest rates across both centralized and decentralized platforms, Coinbase’s APY ranges between 1.5% and 6%, placing it at the lower end of the spectrum relative to decentralized options such as Affine DeFi, which offers up to 25.32% APY. However, the platform’s yield remains competitive when considering factors like regulatory compliance, user trust, and ease of access. Notably, Coinbase’s product is available to users in regulated markets, ensuring a level of security and oversight that is less common in decentralized platforms.

Coinbase’s expansion is part of a broader global strategy, with the company recently appointing new regional "country leads" for Base, its Ethereum Layer 2 scaling solution. These leads are tasked with building local user communities and supporting developer ecosystems in regions including Argentina, Brazil, South Korea, and Singapore. The initiative is a key component of Base’s 2025 roadmap, which includes scaling to $100 billion in onchain assets and onboarding 25 million users. These efforts signal Coinbase’s confidence in the long-term viability of Layer 2 solutions and its ambition to position Base as a mainstream blockchain for consumer use.

In parallel, Coinbase has outlined a second phase of international expansion, targeting markets with clear regulatory frameworks, including the EU, UK, Brazil, and Singapore. The exchange has emphasized the importance of regulatory clarity in its strategy, noting that 83% of G20 members and major financial hubs have made progress toward establishing crypto rules. In contrast, the U.S. has lagged in regulatory development, prompting Coinbase to pursue expansion opportunities outside the country. The company is currently in the final stages of selecting a location for its MiCA hub within the EU, aligning with its broader vision of diversifying its global footprint.

The onchain lending product complements Coinbase’s recent product innovations, including its derivatives offering in Bermuda and the launch of a Web3 wallet. These developments are part of the company’s "Go Broad, Go Deep" strategy, which seeks to expand both geographically and in terms of product offerings. As Coinbase continues to navigate its legal challenges in the U.S., particularly its ongoing dispute with the SEC, the company remains committed to innovation and user-driven growth. Analysts have generally remained optimistic about Coinbase’s prospects, with an average one-year price target of $371.40, representing a potential 6.03% upside from its current stock price. However, some models, such as the GF Value estimate from GuruFocus, suggest a potential downside of 24.36%, underscoring the volatility and uncertainty in the crypto market.