The Growing Role of Coinbase in Driving USDC Adoption for Payments and Financial Services
Coinbase (COIN) is expanding its influence beyond merely distributing USDC, positioning itself as a pivotal force in driving the adoption of Circle’s USDC stablecoin for payments and financial services, as highlighted by Wall Street firm Bernstein in a recent research report.
Expanding Services and Partnerships
The cryptocurrency exchange recently introduced Coinbase Payments, a platform developed in collaboration with Stripe and Shopify, and launched Coinbase Commerce, aimed at serving startups and small businesses. Both of these initiatives are leveraging Circle’s USDC stablecoin to facilitate transactions. Additionally, in the derivatives market, Coinbase has partnered with Nodal Clear to enable the use of USDC as collateral in U.S. futures trading.
According to analysts at Bernstein, led by Gautam Chhugani, Coinbase’s Base blockchain has already handled over $3.7 billion in USDC and facilitated $6.8 trillion in USDC-related transaction volume so far this year.
Revenue Sharing and Equity Stakes
Notably, Coinbase holds a direct equity interest in Circle (CRCL), the creator of USDC, and has a revenue-sharing agreement related to the stablecoin. Under the new arrangement, Coinbase now receives all interest income from USDC held on its platform, while revenue from USDC held off-platform is split evenly between Coinbase and Circle.
Significance of Stablecoins
Stablecoins, such as USDC, are digital assets pegged to a stable asset like the U.S. dollar or gold. These coins play a crucial role in the cryptocurrency ecosystem, facilitating global money transfers and providing stability in volatile markets.
According to Chhugani, the revenue generated from stablecoins has become a substantial source of income for Coinbase, with non-trading revenue skyrocketing from $181 million in 2020 to $2.8 billion in 2024, now constituting 42% of the company’s total revenue.
Future Growth and Market Outlook
This strategic shift underscores Coinbase’s commitment to expanding the utility of USDC beyond trading, focusing on its integration into payments and decentralized finance (DeFi) sectors as a key driver of long-term growth, as highlighted in the Bernstein report.
Bernstein maintains an optimistic outlook on both Coinbase and Circle, assigning them an outperform rating and setting individual price targets of $510 and $230, respectively.
For more details, read the original article on CoinDesk.
