Coinbase is Driving Adoption of Circle’s USDC for Payments, Financial Services: Bernstein

Coinbase’s strategic shift positions it as a key player in stablecoin adoption, extending beyond its role as a USDC distributor. This evolution is highlighted in a recent Bernstein research report, which emphasizes Coinbase’s multifaceted approach to leveraging USDC across various financial sectors.

The report details Coinbase’s initiatives to integrate USDC into its payment and financial services offerings. The launch of Coinbase Payments, in collaboration with Stripe and Shopify, and Coinbase Business, targeting startups and smaller companies, both utilize USDC as their underlying stablecoin. This expansion into payment processing demonstrates a commitment to increasing USDC’s real-world utility.

Furthermore, Coinbase’s foray into derivatives markets, partnering with Nodal Clear to use USDC as collateral in U.S. futures markets, signifies another strategic step toward expanding USDC’s use cases. The remarkable volume processed on Coinbase’s Base blockchain underscores the scale of USDC adoption. The blockchain has handled over $3.7 billion in USDC and facilitated $6.8 trillion in USDC-related settlement volume year-to-date.

Coinbase’s financial stake in Circle, the issuer of USDC, further solidifies its commitment to the stablecoin. A revenue-sharing agreement ensures Coinbase benefits directly from USDC’s growth, with 100% of interest income from on-platform USDC and a 50/50 split for off-platform USDC. This revenue stream has significantly boosted Coinbase’s bottom line. Non-trading revenue has surged from $181 million in 2020 to $2.8 billion in 2024, now constituting 42% of total revenue.

This dramatic increase in non-trading revenue underscores the importance of USDC to Coinbase’s long-term strategy. The company is actively working to expand USDC’s utility in payments and decentralized finance (DeFi), establishing it as a crucial driver of future growth beyond traditional trading activities. Bernstein analysts maintain an “outperform” rating for both Coinbase and Circle, with price targets of $510 and $230, respectively. The report concludes that Coinbase’s strategy makes it one of the most misunderstood and potentially valuable businesses in the crypto space.