The Rise of Stablecoins and Coinbase's Investment Logic

Author: Andrew Van Aken and Alex Weseley Source: Artemis Translation: Shan Ouba, Golden Finance

Stablecoins are becoming the core infrastructure of global finance, and Coinbase’s inherent advantage in underlying architecture positions it to capitalize on this wave of benefits. It is also the most high-quality, compliant listed company target for secondary market deployment in the stablecoin industry growth.

The core logic of this article is not just optimistic about the expansion of stablecoin scale, but more importantly: Coinbase can rely on USDC distribution rights, platform reserve funds, the Base public chain, and a revenue-sharing agreement with Circle to continuously realize profits from long-term stablecoin growth. Once stablecoins upgrade to mainstream financial circulation channels, Coinbase will not be a passive beneficiary but one of the most deeply integrated, highly flexible core assets.

Stablecoin Scale Has Surpassed Native Crypto Sector

In the early years, stablecoins were almost exclusively tools within the crypto space. As exchanges and spot trading volumes grew, stablecoin reserves also increased in tandem. But the trend changed completely after 2021: even if crypto prices and spot trading entered a bear market, on-chain trading volume, daily active addresses, and transfer counts for stablecoins continued to rise. Stablecoins have decoupled from crypto market trends and are now fully penetrating various payment scenarios and value storage needs.

After widespread adoption among individual users, institutional funds also entered: BlackRock launched tokenized money market funds, Circle completed an IPO, and regulatory policies like the U.S. “GENIUS Act” advanced implementation. The compliance attributes and functions of stablecoins within traditional financial systems continue to upgrade, boosting market optimism. U.S. Treasury Secretary Janet Yellen even predicted that by 2030, the total scale of stablecoins could reach $3 trillion, nearly a tenfold increase from current levels.

Coinbase: Direct Beneficiary of the Stablecoin Super Trend

1. On-Chain Data Advantages Are Solidified

Coinbase is the platform holding the largest USDC reserves globally, and the gap with competitors continues to widen; currently, USDC reserves on the platform approach historic highs, with the overall USDC market cap also hitting record peaks.

2. USDC Distribution Revenue Sharing Has Become Coinbase’s Core Asset

There is a common misconception: that USDC distribution rights belong to Circle. In reality, the opposite is true: this distribution agreement is Coinbase’s core moat. The revenue sharing rate paid by Circle to Coinbase has risen from 17.8% in Q1 2022 to a stable near 50% over the past two years.

The structural reason is simple: Coinbase can almost earn all the revenue from the USDC it holds in its products, and based on the Payment Base revenue sharing mechanism, also earns 50% of the platform’s off-balance sheet income. As Coinbase’s issuance volume grows (by Q1 2026, the USDC holdings in Coinbase products are projected to reach an average of $19 billion, a record high), its share in the revenue distribution mechanism will also increase.

From an investor’s perspective: Coinbase enjoys the revenue level of a stablecoin issuer but does not bear the operational costs and compliance expenses of issuance. The cooperation agreement is renewed every three years, as long as the product, company, and distributor meet three thresholds; official documents clearly state: if standards are met, Circle cannot unilaterally terminate the agreement. Renewal is not renegotiation but an automatic extension, with renewal terms largely controlled by Coinbase, making it nearly a perpetual agreement.

Regardless of how Circle’s operators change, the revenue sharing ratio remains fixed. The benefits from stablecoin expansion and USDC market cap growth are directly passed through to Coinbase’s revenue.

3. Regulatory Implementation Further Strengthens the Moat

The value of Coinbase’s stablecoin business under the U.S. “CLARITY Act” is severely underestimated by the market. Relying on distribution and reserve revenue sharing with Circle, in the current interest rate environment, this revenue has already matched Circle’s profitability as an issuer; combined with Coinbase’s USDC rebate products, future revenue depends on the final implementation of the “Tillis-Alsobrooks Compromise Act.”

The market generally underestimates the scale and sustainability of such stablecoin revenues, viewing them as ancillary to exchange operations rather than as an independent underlying infrastructure income. Once the “CLARITY Act” is enacted, it will formally establish a compliant framework for stablecoin clearing, settlement, and circulation, clarifying the role of institutional fund flow intermediaries. This will redefine Coinbase’s value: it will no longer be a consumer-grade platform that fluctuates with retail trading enthusiasm but a core infrastructure layer for stablecoin applications within a compliant institutional system.

USDC Future Growth Potential

As blockchain’s underlying channels support increasingly diverse applications, USDC has become an indispensable settlement and collateral asset across various scenarios. Leading protocols like Polymarket, Hyperliquid, and MakerDAO have all experienced explosive growth in USDC reserves. As new blockchain financial scenarios continue to emerge, USDC will further consolidate its position as a foundational infrastructure.

Coinbase is also poised to capture the next major growth in stablecoins: the payments sector. Over the past year, B2B and B2C payment volumes via bank card channels have surged, and USDC’s market share in these transactions continues to rise.

Data from USDC address-to-address transfers (a key indicator for offline payment transactions) shows: USDC is steadily gaining market share from USDT.

Most market participants believe Stripe (valued at $159 billion in February 2026) and Tempo will lead the smart e-commerce payments sector, but on-chain data suggests otherwise: 92.8% of real smart payment transactions occur on the Base public chain, with 99.8% settled in USDC.

For a deeper understanding of how smart e-commerce is driving the next core demand for stablecoins, refer to the full Coinbase in-depth analysis.

Summary

Coinbase is already the absolute leader in the USDC ecosystem and revenue landscape. As stablecoins continue to expand and new demands emerge in trading and commercial payments, Coinbase is fully capable of capitalizing on this industry trend. With new entrants and clearer regulatory frameworks in the future, stablecoins are expected to reach a market cap of 3 trillion USD, and Coinbase will likely lock in a significant share within the platform, benefiting long-term.