Digital assets and interest: a sober guide

Interest products on digital assets are marketed side by side with ordinary bank savings, and they belong to a completely different risk class. Conflating the two is one of the most expensive misunderstandings in modern personal finance. This guide is deliberately cautious, because caution is the correct starting point here.

The decisive difference: what you own

At a bank, a deposit is a claim on a licensed institution, covered up to a statutory limit by a compensation scheme that pays out if the bank fails. The value does not move.

On a crypto platform, a yield-bearing balance is usually something quite different: you have lent your asset to the platform, which uses it and pays you part of the proceeds. In an insolvency that makes you an unsecured creditor, ranking behind secured lenders, and the underlying asset can also have fallen sharply in value while you wait.

Two risks stacked, then — the platform and the asset — against one return.

This is not hypothetical

The 2022–2023 cycle settled the argument. Celsius, BlockFi and others offered exactly these products, marketed in exactly this language, and customers discovered in the insolvency that their "accounts" were unsecured claims against a failed company. Recoveries were partial and took years.

Nothing structural has changed since. Regulation improved; the product's legal shape did not.

What MiCA does and does not do

In the EU, the Markets in Crypto-Assets regulation created an authorisation regime for crypto-asset service providers — a CASP licence — covering custody, exchange and related services, with separate rules for stablecoin issuers.

It is a genuine improvement in custody, disclosure and conduct standards. It is not deposit insurance, and it frequently does not cover lending and yield products even at an authorised firm.

That distinction matters when reading a platform's own marketing. Take Nexo as the worked example, since it is among the best known: as of August 2026 it did not hold a MiCA CASP authorisation in its own name — it filed an application with Bulgaria's Financial Supervisory Commission in February 2026 — and it operates in the EEA through licensed partners for custody and brokerage. The earn rewards and crypto-backed loans sit outside those partners' authorisations, under Nexo's own terms.

None of that predicts failure. It does mean the yield is not underwritten by any banking licence, and anyone telling you the platform is "EU regulated, so it is safe" is eliding both halves of the sentence.

Questions to answer before depositing anything

• Where does the yield come from? If a platform cannot explain the source of a return well above what banks pay in the same currency, that is the answer.
• Is the asset lent out or held in custody for you? These are opposite arrangements. Custody in your name survives an insolvency far better than a lending balance.
• Who holds it, and under what authorisation? Ask whether the firm you contracted with holds the licence, or a partner does.
• Does that authorisation cover this product? Yield and lending are the usual exclusions.
• What ranks ahead of you if it fails? For lending products, almost everyone.
• Can you withdraw during stress? Withdrawal suspensions are the standard first symptom, and they arrive without notice.

Where it belongs, if anywhere

The order matters more than the allocation.

• **A budget** that tells you what is genuinely spare.
• **An emergency fund** in cash, reachable the same day, entirely separate from any of this.
• **A savings account** for money with a purpose and a date.
• Then, and only then, speculation with money whose complete loss would change nothing about your life.

Never fund any of this with an emergency fund, borrowed money, or cash needed within a few years. Never keep it in the same place as money you depend on — if a platform freezes withdrawals, you want that to be an annoyance rather than an emergency.

The honest summary

The word "interest" is doing an enormous amount of work in this category. At a bank it describes a modest, insured return on a stable balance. On a crypto platform it describes payment for lending a volatile asset to a company with no compensation scheme behind it.

Both are legitimate things to do with money. They are not versions of the same thing, and the moment you treat the second as a higher-rate version of the first is the moment the risk stops being priced.

Always separate speculation from saving, and risk only what you can bear to lose. This is not financial advice, and digital assets involve high risk.