While the USD and its derivatives – such as in the form of stablecoins – are inherently designed to lose value over time, some people still prefer to maintain a certain portfolio exposure to the United States Dollar.
Be it that they are willing to pay for the predictability (as the value of the USD erodes slowly over long periods, rather than being exposed to wild and volatile market swings), or that they believe they “need to keep some dry powder” because “the markets are about to crash.”
Whatever the individual reasoning might be for adding fiat currency and its derivatives to one’s personal balance sheet:
The Federal Reserve and its allied institutions serve a crucial market need for billions of people around the world – and benefit handsomely by doing so.
The idea that “everything gets more expensive all the time” is a misperception that most fiat users fall victim to.
As a market-oriented society, goods and services tend to be produced more efficiently over time, which usually results in lower prices—if you measure it with the right money.
Gold, for example.
Take a look at some of your favorite goods and services across time, measured in Gold at the time, and you’ll likely notice some interesting trends over the decades.
Just be prepared for sudden onsets of anger if you do this exercise for the first time.
The numbers
Now, enough with the disclaimers about how excessive fiat currency holdings usually lead to despair, anxiety, and ultimately poverty.
You might be still in the position where you want to maintain some USD exposure for personal reasons.
So, why might the BitcoinVN USDC staking vault be an interesting option?
First, another disclaimer:
- Holding funds in a BitcoinVN staking vault is a fully custodial solution – you give up control of your keys and, with that, control of your funds.
- While our company has been around for over a decade, you’re still entrusting us to not lose your funds in one way or another.
- The best option, in our view, for the average user is still to keep funds self-custodial in their own hardware wallet. For example, a Trezor device can support USDC on common chains like Ethereum or Solana.
Ok, ok – you’ve got that.
Now, give me the numbers!
The “floor” for yield-bearing instruments on the US Dollar is generally set by US Treasuries.
These interest rates are highly dependent on announcements from the Federal Reserve – currently made by the magic money wizard Jay Powell – who, once a month, officially declares the price of the US Dollar.
If you can’t even beat that as your benchmark – why bother!
Basically, any other instrument adds additional risks, which need to be rewarded accordingly.
By combining these numbers, we can currently assess that the market adds a risk premium of around ~20% to keep your funds with BitcoinVN versus simply keeping them in your TradFi brokerage account via Treasury Direct.
Which is – probably – a fair assessment!
After all, you’re dealing with an “unlicensed cryptocurrency exchange” in the “Wild East” of Vietnam.
While we have a strong track record in our industry, this is still not the place to entrust your life savings (or any money you can’t afford to lose, really!).
With all that said, if you’re still looking to gain some exposure to the USDC yield, you can do so here:
Stake USDC with BitcoinVN
You can deposit and withdraw USDC from all common blockchains.
Withdrawals can be made at any time to any valid address. However, please note that unstaking within the first three months will incur a 0.5% early withdrawal penalty (to prevent manipulation of rates through frequent deposits and withdrawals).
You can also swap your staked USDC at any time for any other digital asset offered on the platform, or withdraw it directly as VND to your domestic bank account in Vietnam, or as VND cash via one of our Cash Offices across the country.
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Further reading:
How does staking on BitcoinVN work?
BitcoinVN Staking Program – Frequently asked questions
Why are staking rewards so high at BitcoinVN?
Maximizing Staking Rewards with BitcoinVN: 5 Strategies to Boost Your APR
