Why is Coinbase able to succeed in the era of AI-native finance

Author: Alex Weseley, Jon Ma, Andrew Van Aken Source: Artemis Translation: Shan Ouba, Jinse Finance

In short: Most people only see Coinbase as a crypto broker highly tied to Bitcoin and crypto trading volume. This narrow perspective overlooks a long-term macro trend: by 2031, the global stablecoin supply will reach 3 trillion USD, and the scale of intelligent agent commerce will hit 7.5 trillion USD, with Coinbase continuously realizing value from these. Its two core advantages: co-creating USDC with Circle, and holding a favorable USDC distribution revenue-sharing agreement; at the same time, developing the x402 protocol and the Base public chain — now, most smart agent business transaction settlements occur within this ecosystem.

Introduction

We previously assisted McKinsey in estimating the actual stablecoin payment transaction volume and authored in-depth analysis on smart agent commerce and the overall landscape of digital finance by 2030. As crypto and artificial intelligence deepen integration, Coinbase will no longer be just a crypto exchange; it is transforming into the settlement infrastructure, distribution channel, and business transaction foundation for AI-native finance.

The market generally only regards Coinbase as a cyclical crypto broker, with stock price movements closely following crypto market trading volume fluctuations. Because of this, Coinbase’s stock performance is highly correlated with traditional brokers like Interactive Brokers, Charles Schwab, and Robinhood.

In contrast, Circle is directly viewed as a beneficiary of stablecoin growth, with a forward P/E ratio as high as 103.9 times, enjoying valuation premiums far above those of brokers.

Our judgment: relying on stablecoin dividends and the wave of intelligent agent payments, by 2031 Coinbase’s market cap could reach 300 billion USD, a sixfold increase from now, with an annual compound growth rate of 35% — its core identity will no longer be just a crypto exchange but a key winner of two major eras. Full valuation model available via the link at the end of the article.

Core Assumptions

1. The total global stablecoin supply will reach 3 trillion USD by 2031;

2. The scale of global intelligent agent commerce will reach 7.5 trillion USD by 2031;

3. Traditional exchange revenue remains consistent with market expectations: approximately 6 billion USD in transaction-related revenue by 2028.

A widely overlooked fact is that Coinbase is simultaneously positioned at two major long-term cross-era growth opportunities:

Opportunity One: Rise of Stablecoins and Explosive Global Digital USD Demand

U.S. Treasury Secretary Scott Bessent predicts that by 2030, stablecoin supply will reach 3 trillion USD, a tenfold increase from today; Bain & Company estimates a 12-fold growth to 3.8 trillion USD by 2030.

Opportunity Two: Emergence of Smart Agent Commerce

McKinsey forecasts that by 2030, the global scale of smart agent commerce will reach 3–5 trillion USD. Our calculations show that at that time, one-third of commercial transactions will migrate on-chain for settlement, relying on protocols like x402 and MPP for payment. Current on-chain data clearly shows: smart agent payments are rapidly growing across multiple public blockchains.

Coinbase is the most certain beneficiary of these two opportunities: it is the largest global distributor of USDC with the strongest regulatory compliance, and it also owns the market-leading ecosystem of smart agent payment networks.

Even if institutions remain skeptical of DeFi and believe the crypto market has fallen silent, Coinbase can still succeed. Its growth does not depend on crypto market trends or exchange trading volume, but on the industry’s most trusted, dominant stablecoin platform and the underlying infrastructure for AI smart agent payments.

How Coinbase Secures the Stablecoin Dividend

The market has not truly understood: even if crypto trading volume declines, the scale of stablecoin usage remains long-term upward, and Coinbase is a guaranteed winner in stablecoin growth.

The core value of the USDC distribution agreement belongs to Coinbase, not Circle. The revenue share paid by Circle to Coinbase has increased from 32% in 2022 to around 50% over the past two years, maintaining stability. The underlying logic is very clear: Coinbase almost fully retains the interest income from the reserves of USDC held within its own products, and based on the “payment underlying revenue sharing rules,” it earns a significant portion of the revenue from USDC balances held outside the platform. As Coinbase’s distribution scale continues to expand (by Q4 2025, the average USDC holdings within Coinbase products will reach 17.8 billion USD, a new high), its share of revenue grows accordingly.

From an investor’s perspective, this partnership’s essence is more like Coinbase outsourcing regulatory compliance and reserve asset custody to Circle, rather than Circle simply paying for Coinbase’s distribution channel. The partnership agreement is set for three years, and as long as product, company, and distributor qualifications are met, it automatically renews. Public documents clearly state: as long as standards are met, Circle has no right to terminate the agreement.

This renewal mechanism is not a renegotiation at expiration but a long-term lock-in. For Circle, withdrawing from the partnership means losing Coinbase’s largest USDC distribution channel; for Coinbase, once regulation is in place, stablecoin payment scale is widespread, and USDC market cap expands significantly, all incremental dividends are directly realized according to the existing contract. The contract design ensures that regardless of changes in Circle’s operating entity, Coinbase’s revenue position will continue to strengthen.

Future Growth Potential of USDC Applications

Beyond Coinbase’s ecosystem, USDC is also seeing a surge of new protocol applications. Over the past two years, USDC holdings within protocols like Polymarket, Hyperliquid, MakerDAO, etc., have grown substantially. As blockchain platforms continue to spawn new financial scenarios, the demand for USDC within protocol ecosystems will keep increasing.

Coinbase has secured a strategic position and is poised to capture the next wave of stablecoin payment growth. Over the past year, the scale of B2B and B2C payments via bank card channels has grown significantly, with USDC’s market share in these transactions steadily increasing.

Using on-chain USDC address-to-address transfers as a proxy for real payments, it is clear that: USDC is continuously gaining market share from USDT.

Is the market misreading the CLARITY Act?

The “Digital Asset Market Clarity Act” (H.R. 3633, called CLARITY Act) was passed by the U.S. House of Representatives on July 17, 2025, with a bipartisan vote of 294 in favor and 134 against. The bill will establish a comprehensive regulatory framework for digital assets other than payment-stablecoins.

For Coinbase, the CLARITY Act is the most impactful pending legislation in its regulatory environment, building an almost complete federal regulatory system for the digital asset ecosystem Coinbase operates in.

The bill’s value to Coinbase’s stablecoin business profitability is greatly underestimated by the market. Relying on the distribution and reserve revenue-sharing arrangements with Circle, under current interest rate assumptions, Coinbase’s revenue from USDC has already matched Circle’s own profitability as an issuer; combined with Coinbase’s USDC rewards program, its ultimate scale depends on the final text of the Tilles-Obrbrooks compromise clause.

The market generally underestimates the volume and sustainability of revenue associated with stablecoins, viewing it merely as an ancillary business of exchanges rather than an independent, core infrastructure-based profit source. The CLARITY Act, by formally establishing the regulatory framework for stablecoin clearing, settlement, and circulation, clarifies the necessary compliant intermediaries for institutional fund flows, further reinforcing this logic. The bill redefines Coinbase’s stablecoin business: it is no longer just a consumer product line fluctuating with retail token trading, but a core asset within a compliant, institutionalized underlying system.

How Coinbase Leads in the Smart Agent Payment Race

Most investors believe Stripe (market cap $159 billion as of February 2026) and Tempo will monopolize the smart agent business, but on-chain real data shows the opposite:

• 92.8% of actual smart agent payment volume occurs on the Base chain;

• 99.8% of smart agent transactions are settled in USDC;

• Over 99.8% of all smart agent payment transactions are based on Coinbase’s open-source payment protocol x402.

AI smart agents are evolving from simple Q&A assistants to autonomous trading systems representing users: executing trades via APIs, data endpoints, computing resources, and inference services, at costs below $0.001 per transaction, with machine-second speeds.

Traditional bank card channels are inherently unsuitable for these scenarios: a typical bank card transaction incurs fixed costs of about $0.03–$0.04 beyond clearing fees, making small API calls at $0.003 economically infeasible—costs are two orders of magnitude higher. Stablecoins settled on high-performance Layer 2 public blockchains, with costs of just a few tenths of a cent per transaction and instant settlement, can establish billing relationships without manual intervention.

McKinsey forecasts that by 2030, global smart agent commerce will reach $3–5 trillion; Gartner estimates that by 2028, AI smart agents will handle over $15 trillion in enterprise procurement transactions. Both are directional forecasts, but the clear trend is: once such transactions scale, they are naturally more compatible with stablecoin payment channels, with USDC already the default settlement asset, and Coinbase stands to benefit directly.

Industry Landscape Summary

The native HTTP micro-payment standard x402, jointly developed by Coinbase and now managed by the Linux Foundation, has become a leading open-source protocol for initiating smart agent payments. Since October 2025, x402 has processed over 180 million smart agent payments, covering more than 5,000 merchants providing services to AI agents, with a total transaction volume of $47.5 million.

When merchants open their services for AI agent invocation, Coinbase’s Base public chain and USDC are the default underlying payment infrastructure. Additionally, Agentic.Market allows Coinbase to further control resource discovery and matching: if AI agents use this platform to find, evaluate, and access x402 services, Coinbase can profit from on-chain settlement and USDC flow, and also leverage its role in transaction matching to accumulate transaction value between agents and service providers.

Four Core Revenue Paths for Coinbase

Centered on stablecoins, Coinbase monetizes smart agent commerce through four business lines: USDC reserve interest, Base chain settlement revenue, CDP/AgentKit developer commercialization, and Agentic.Market platform distribution revenue.

1. USDC Reserve Interest — This is Coinbase’s largest potential revenue source, even surpassing trading fees. AI agent wallets need to pre-deposit balances for autonomous spending, API payments, pay-as-you-go services, and real-time machine settlement. As AI agents become independent economic entities, the USDC held in Coinbase’s custody will generate continuous interest income. Every $1 USDC held by agents, regardless of turnover speed, can generate ongoing reserve interest.

2. Base Sequencer Revenue — All transactions on Base involving protocols like x402 and MPP are included in the sequencer for on-chain packing, generating priority fees. This revenue grows with transaction count, not just volume — but since smart agent commerce is inherently high-frequency and small-value, it exceeds typical business transactions. Long-term, on-chain fee costs will decline, making sequencer revenue a smaller proportion of overall incremental income.

3. CDP, AgentKit, and Service Intermediation Monetization — Coinbase can monetize developer layers: supporting agent creation of wallets, permission management, gas payments, payment infrastructure, etc. Revenue sources include x402 transaction fees, wallet infrastructure fees, fee-free transactions, key management, permission controls, and enterprise developer subscriptions. Once CDP becomes the default infrastructure for smart agent payments, even very small terminal payments can generate ongoing platform revenue.

Incremental Growth Estimation

Assuming that by 2030, global smart agent commerce reaches $50 trillion annually, most transactions will still use traditional channels like bank cards, automated clearinghouses, bank transfers, and inter-account transfers—especially large-scale personal and enterprise procurement. However, machine-native, high-frequency cross-border, API-driven commercial transactions will predominantly adopt stablecoins and protocols like x402 and MPP.

We estimate about 20% of these transactions will be settled via stablecoin channels, corresponding to $1–1.5 trillion in annual stablecoin smart agent payments. The optimistic revenue scenario is as follows:

• USDC reserve interest: average USDC holdings of agents at $200 billion × 4% annual reserve yield × 50% share = $4 billion

• CDP/AgentKit/intermediary and platform distribution: developer subscriptions, wallet infrastructure, x402 service fees, market matching, and channel sharing = $750 million

• Base sequencer fees: Base chain handling $250–300 billion in smart agent transactions, with billions of small transactions, at extremely low per-transaction fees = $250 million

Total: just the smart agent business could bring Coinbase approximately $4.25 billion in annual incremental revenue. The core conclusion: once Coinbase secures operational accounts, developer platforms, service discovery portals, and on-chain settlement infrastructure, it can accumulate enormous real value; and in recent months, it has already made substantial progress on this path.

Underlying Logic of Coinbase and USDC’s Success

Coinbase’s core moat lies in controlling four interdependent layers of the smart agent payment stack: USDC reserve yield, Base chain settlement, CDP/AgentKit developer infrastructure, and Agentic.Market service discovery and matching.

USDC has become the default settlement asset: developers prioritize integrating USDC due to its comprehensive tool ecosystem, liquidity, and developer support. Base naturally supports USDC-native smart agent payments, with low entry barriers and expanding service intermediary ecosystems. CDP and AgentKit are higher layers, providing developers with wallets, key management, gas payments, and full payment infrastructure, enabling AI agents to conduct complete economic activities. Finally, Agentic.Market can grow into the core portal for discovering, comparing, and routing access to x402 services.

Any competitor attempting to enter must simultaneously replicate the four key components: liquidity, settlement infrastructure, developer infrastructure, and distribution channels; each new AI agent, merchant, or service provider further consolidates Coinbase’s existing ecosystem, raising the barrier to entry.

Conclusion

The market still labels Coinbase as an exchange broker, but it overlooks its efforts to build an AI-native financial infrastructure platform. Global authorities unanimously forecast: by 2030, stablecoin supply will reach $3 trillion, and smart agent commerce will hit $5 trillion, with stablecoin prices decoupled from crypto prices. Coinbase has preemptively positioned itself as a pioneer in these two waves. x402, USDC, and Base have become the de facto technical standards for smart agent commerce, with market shares exceeding 90% in each segment, far ahead of competitors.

Coinbase possesses three rare advantages: self-developed Base public chain, incubation of the x402 protocol, and substantial USDC revenue sharing. The current market valuation misjudges three points:

1. The agreement with Circle is a long-term lock-in structure, not a simple renewal, ensuring perpetual stablecoin revenue;

2. The CLARITY Act officially recognizes Coinbase’s compliant infrastructure layer, revaluing its core infrastructure role beyond ordinary consumer business;

3. The four-layer smart agent ecosystem creates a self-reinforcing compound effect: each new agent and merchant further widens the moat.

Coinbase’s valuation should align with the tech infrastructure sector, not traditional brokers. Relying on these two cross-era dividends, we are optimistic about Coinbase’s market cap reaching $300 billion, with future revenue mainly from stablecoins, smart agent commerce, and subscription/service businesses, no longer solely dependent on crypto trading commissions.