📰 Circle issues USDC in partnership with Coinbase, who controls the users—so who has the real say when it comes time to split the money? This past August, the two companies’ revenue-sharing agreement was extended to 2029 under the original terms. Circle obtained the license as well, but even in this renewal, it couldn’t change the existing arrangement.
🔥 In plain terms: in Q2 2026, Circle paid Coinbase $324.6 million in related distribution costs. In the same period, the average USDC balance in Coinbase’s products reached $20 billion, accounting for more than 30% of the USDC circulating supply at quarter-end. Both users and balances are on the platform—so for the issuer to bypass the channel, it’s not that easy.
To be honest, using USDC more often doesn’t automatically mean Circle can earn more profit by the same amount. In that quarter, on-chain USDC transaction volume grew 151%, average circulating supply rose 25%, but reserve revenue only increased 5%. The reserve yield fell by 66 basis points, and a large portion of the revenue uplift from balance growth was absorbed.
💡 This made me rethink the payment story for stablecoins: the faster money moves, the more it may not require keeping ever more USDC sitting in accounts earning interest. Circle needs to look at interest rates, and it also has to split revenues with the channels that control the users. Business is bustling, but that doesn’t mean the issuer can keep all the proceeds.
🤔 When it’s time to discuss renewal again in 2029, do you think Circle most needs to change its reliance on distribution via Coinbase, or its reliance on reserve interest?
#USDC #Circle #Coinbase #stablecoin
🔥 In plain terms: in Q2 2026, Circle paid Coinbase $324.6 million in related distribution costs. In the same period, the average USDC balance in Coinbase’s products reached $20 billion, accounting for more than 30% of the USDC circulating supply at quarter-end. Both users and balances are on the platform—so for the issuer to bypass the channel, it’s not that easy.
To be honest, using USDC more often doesn’t automatically mean Circle can earn more profit by the same amount. In that quarter, on-chain USDC transaction volume grew 151%, average circulating supply rose 25%, but reserve revenue only increased 5%. The reserve yield fell by 66 basis points, and a large portion of the revenue uplift from balance growth was absorbed.
💡 This made me rethink the payment story for stablecoins: the faster money moves, the more it may not require keeping ever more USDC sitting in accounts earning interest. Circle needs to look at interest rates, and it also has to split revenues with the channels that control the users. Business is bustling, but that doesn’t mean the issuer can keep all the proceeds.
🤔 When it’s time to discuss renewal again in 2029, do you think Circle most needs to change its reliance on distribution via Coinbase, or its reliance on reserve interest?
#USDC #Circle #Coinbase #stablecoin