In a strategic move to attract and retain crypto investors, Gemini has launched a high-yield interest program in partnership with Genesis, a leading crypto lending platform. The offering allows users to earn up to 7.4% annual percentage yield (APY) on their cryptocurrency holdings—a compelling alternative to traditional financial products with stagnant returns.
This initiative aligns with Gemini’s broader vision of bridging the gap between conventional finance and digital assets by introducing bank-like services tailored for the crypto economy. As interest in decentralized finance (DeFi) grows, centralized platforms like Gemini are responding with structured, user-friendly products that offer predictable yields while maintaining regulatory compliance.
Bridging Traditional Finance and Crypto Innovation
“Noah Perlman, Gemini’s chief operating officer, noted that many customers are frustrated by the low interest rates in traditional finance. “We have a lot of customers who look at the interest rate in traditional finance, which is pretty anemic,” Perlman said. By offering competitive yields, Gemini aims to incentivize users to keep their digital assets on the platform rather than moving them elsewhere.
The 7.4% APY is competitive within the centralized crypto lending space, though it falls short of the often-volatile returns seen in DeFi yield farming. However, what it lacks in peak yield potential, it makes up for in stability and accessibility—especially for mainstream users wary of complex smart contract risks.
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Nationwide Availability and Future Expansion
One of the standout features of this product is its availability across all 50 U.S. states, including New York—a notable achievement given the state’s strict regulatory environment for crypto businesses. Gemini holds a trust charter from the New York State Department of Financial Services (NYDFS), which enables it to offer such services legally within the state.
Currently, active Gemini customers can participate in the yield program with any cryptocurrency available on the platform. In the near future, users will also be able to earn yield on Gemini Dollar (GUSD), the exchange’s regulated U.S. dollar-pegged stablecoin. This expansion will further enhance the utility of GUSD and strengthen Gemini’s position as a full-service crypto financial platform.
How the Partnership Works
Under the arrangement, Genesis acts as the lending arm, providing institutional loans that are funded in part by customer deposits collected through Gemini. In return, depositors earn interest generated from the loan spreads.
Gemini takes a portion of the spread between the interest paid to depositors and the higher rate charged by Genesis on its institutional loans. To ensure safety and transparency, Yusuf Hussain, Gemini’s head of risk, stated that the company conducted due diligence on Genesis’ financials and confirmed that all loans are overcollateralized—a key safeguard against default risk.
Overcollateralization means that borrowers must pledge more in crypto assets than they receive in loans, creating a buffer that protects lenders—and by extension, depositors—if market prices drop suddenly.
A Growing Trend in Crypto Lending
This collaboration marks the third such partnership for Genesis. The lender previously teamed up with Ledn and Luno to power interest-bearing accounts on their platforms. While these partnerships currently represent a small fraction of Genesis’ total loan volume, CEO Michael Moro believes they will grow significantly over time.
“As far as percentages of loans coming from partnerships, it’s still relatively a small part right now, largely because they are relatively new,” Moro said. “But we expect the numbers to become more significant over time as a sign of the success of these partnerships.”
Such alliances reflect a maturing crypto ecosystem where specialized firms collaborate to deliver end-user financial products without each having to build every component in-house.
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Frequently Asked Questions (FAQ)
Q: Is the 7.4% APY guaranteed?
A: The 7.4% annual percentage yield is variable and subject to change based on market conditions and demand for loans. It is not a fixed or guaranteed rate over time.
Q: Which cryptocurrencies are eligible for yield earning?
A: Any cryptocurrency available on the Gemini platform is currently eligible. Support for GUSD, Gemini’s stablecoin, will be added in the coming months.
Q: Is my money safe in this program?
A: While no investment is risk-free, Gemini states that Genesis’ loans are overcollateralized and have undergone financial review. However, unlike FDIC-insured bank accounts, crypto deposits are not insured against loss.
Q: Can I access my funds anytime?
A: Yes, users retain control over their assets and can withdraw or trade at any time, though specific terms may apply depending on product updates.
Q: Why did New York sue Gemini and Genesis?
A: On October 19, 2023, the New York Attorney General filed a lawsuit alleging that Gemini and Genesis defrauded investors by failing to disclose that loans were undersecured. This legal action is ongoing and highlights regulatory scrutiny in the crypto lending space.
Q: How does this compare to DeFi yield farming?
A: DeFi platforms often offer higher yields but come with greater technical complexity and smart contract risks. Gemini’s product provides lower but more stable returns with a simpler user experience.
The Road Ahead for Crypto Savings Products
As digital assets become more integrated into everyday finance, platforms like Gemini are positioning themselves as gateways for mainstream adoption. By offering familiar financial tools—such as interest-bearing accounts—with the advantages of blockchain technology, they’re making crypto more accessible to average investors.
However, regulatory challenges remain a critical factor. The recent lawsuit from New York underscores the importance of transparency and compliance in crypto lending practices. Going forward, platforms will need to balance innovation with accountability to maintain user trust and regulatory approval.
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While the landscape continues to evolve, one thing is clear: crypto savings accounts are no longer niche experiments—they’re becoming a core offering in the next generation of financial services.