River’s New 3.8% Interest Product
River, a U.S.-based financial services company, has introduced a new product. This service allows users to earn 3.8% interest in Bitcoin on USD deposits. With this, River aims to combine the stability of USD with the growth potential of Bitcoin. The cash deposits are insured by the FDIC, up to $250,000, thanks to a partnership with a bank.
Earning Interest in Bitcoin
River’s official X account announced the product with a bold claim. It urged people to stop losing value to inflation with regular high-yield accounts. Instead, it suggested users could build wealth in Bitcoin. Unlike other companies, River separates its Bitcoin holdings from yield generation. This allows users to verify the company’s holdings through the Proof of Reserve protocol.
Clarifying the Cash Interest Process
Alex Leishman, River’s CEO, emphasized that the company holds 100% of the Bitcoin it receives. Users can verify this via the Proof of Reserve protocol. Leishman explained that River has no plans to become a bank itself, despite partnering with an FDIC-insured institution. He stressed that getting a banking charter would be a massive undertaking.
Security and Transparency
In light of previous failures like BlockFi and Celsius, River stands apart. These companies risked user Bitcoin to generate yield, but River ensures 100% reserve custody. The interest is only earned on cash deposits, not Bitcoin. River converts the cash interest into Bitcoin daily, automatically adding it to user accounts.
Comparing to Other Bitcoin Accumulation Methods
River’s product faces competition from other options for accumulating Bitcoin. Fold offers Bitcoin cashback through everyday spending, while Ledn allows users to earn up to 2.5% APY on Bitcoin deposits. River’s competitive 3.8% interest on USD deposits adds a unique option for users looking to grow their Bitcoin holdings.
