Accrued interest is the interest that builds up on a financial obligation or interest-bearing asset up to a specific date, even if the cash payment has not happened yet. In other words, the interest has been incurred or earned, but it remains unpaid or uncollected.
How accrued interest works in crypto
In crypto lending, borrowing, and savings products, interest typically accrues continuously, often calculated daily or per block, based on the principal amount and the stated rate. Platforms may show an “accrued interest” balance that increases over time, reflecting the lender’s earned interest or the borrower’s owed interest since the last settlement.
For example, if you deposit stablecoins into a lending protocol or custodial yield account, the app may display an accrued interest figure that updates each day. You might not receive the interest into your wallet until a payout date, a withdrawal, or a compounding event, but the accrued amount represents what you have earned so far. On the borrowing side, a user who takes a crypto-backed loan will see interest accruing between repayments, even if they have not made a payment yet.
Where you see it and why it affects accounting
Accrued interest also matters when assets change hands between payment dates. In traditional bond markets, buyers compensate sellers for interest that accrued since the last coupon payment. Crypto has similar concepts when tokens represent claims on yield, such as interest-bearing vault tokens or liquid staking derivatives, where value can reflect accumulated rewards.
From an accounting perspective, accrued interest helps match income and expenses to the period in which they were earned or incurred, not merely when cash moves. This is especially relevant for exchanges, funds, DAOs, and businesses that track treasury performance or liabilities.
Why accrued interest matters in the crypto ecosystem
Understanding accrued interest helps users interpret yield dashboards, compare lending rates fairly, estimate borrowing costs, and avoid surprises at settlement or repayment. It is a core concept for transparency and accurate reporting across crypto credit and yield markets.