Coinbase seen boosting USDC revenue as payments grow

Why Coinbase’s USDC revenue could surge: stablecoin payments and interest

Coinbase’s USDC economics scale with two flywheels: growing stablecoin payments and interest earned on the fiat reserves that back USDC balances. As more consumers and merchants use USDC for everyday and cross-border payments, aggregate balances and transaction float can rise, which in turn lifts interest-derived income.

Institutional research indicates this revenue stream is comparatively steadier than trading fees because it is anchored to short-term instruments that back USDC reserves. Bloomberg Intelligence has characterized stablecoin-driven income as high-margin and tied primarily to interest on USDC reserves, with upside if payments adoption accelerates.

How Coinbase earns USDC revenue: interest and Coinbase–Circle revenue share

Coinbase monetizes USDC through interest on reserves and economics shared with Circle, USDC’s issuer. According to JPMorgan, interest from USDC held on Coinbase’s platform typically accrues 100% to Coinbase, while interest tied to USDC held off-platform is shared with Circle via distribution arrangements.

JPMorgan also noted that Coinbase earned roughly $300 million from its Circle partnership in Q1 2025, reflecting both distribution payments and interest income, and described a high-margin profile, especially for on-platform balances that do not require splitting. These mechanics help explain why expanding USDC usage, including payments, could have an outsized impact on profitability relative to more cyclical trading revenue.

Immediate impact: revenue mix, margins, and interest-rate sensitivity

A larger USDC footprint could shift Coinbase’s revenue mix toward higher-margin, recurring streams and away from trading-fee volatility. The stability stems from interest on reserves and distribution economics that do not directly depend on spot crypto prices or trading volumes.

Rate sensitivity remains a key variable. After reviewing the model risks, Mizuho Securities cautioned that USDC-related income tied to interest could compress if yields decline. “If interest rates fall, that revenue shrinks,” said Dan Dolev, senior analyst at Mizuho Securities.

At the time of this writing, based on data from NasdaqGS, Coinbase Global (COIN) last closed at 166.02 USD on February 17, with a 52-week range of 139.36–444.65 and a market capitalization near 44.77 billion USD. The year-to-date change stood at approximately -26.59%, a reminder that stock performance can diverge from fundamentals in the short run and should not be conflated with revenue trajectory scenarios.

Policy and market risks: GENIUS, CLARITY, rates, competition

Regulation could shape the ceiling on USDC economics. As reported by Cointelegraph, proposals such as the GENIUS Act (which would prohibit stablecoin issuers from paying interest) and the CLARITY Act could constrain rewards structures or require changes to how USDC yields are shared with users, potentially affecting Coinbase’s margins if enacted.

Competition and the evolution of the Coinbase–Circle split also matter. Bernstein has argued that even if Coinbase’s share of Circle-related revenue tapers, from about 54% toward 50% by 2027, the broader pie may still expand as stablecoin usage grows in payments and financial services beyond trading. Separately, Investing.com has highlighted that any renegotiation of income-sharing terms with Circle, or increased competition from other stablecoins, could influence how much of the USDC tailwind ultimately accrues to Coinbase.