The cryptocurrency exchange Gemini, founded by Tyler and Cameron Winklevoss, plans to launch a savings product that will pay out interest on crypto holdings.
The product will be called Gemini Earn, and there will be no minimum balance required to get started, and no fees to add or remove holdings from an account. It will only be offered to U.S. customers, and will be available in all 50 states.
The annual percentage yield (APY) will vary by the type of cryptocurrency in the account. For instance, the APY on a cryptocurrency called Filecoin will be 7.4%, but only 3.05% on bitcoin. Still, compared to the average national savings-account rate of 0.05%, it's a huge step up.
Gemini told CNBC that it's able to offer such attractive rates by lending out crypto to institutional borrowers, which pay interest on the loans.
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"There is a reason why Wall Street and traditional banking has been around as long as it has," Gemini's chief operating officer, Noah Perlman, told CNBC. "It provides lots of safeguards, and we think that we can get the best of both worlds and offer that to our customers."
Gemini is not the only exchange offering a high-yielding savings product. The crypto lender BlockFi also offers an APY as high as 8.6%, but BlockFi's interest-paying account is currently not available in New York due to state regulations.
Gemini has been launching other banking products. Recently, it acquired the company Blockrize and launched a credit card that offers 3% rewards in the form of bitcoin and other cryptocurrencies.
