Coinbase Is Driving Adoption of Circle’s USDC for Payments, Financial Services: Bernstein
Coinbase’s strategic shift towards driving stablecoin adoption is reshaping its business model, moving beyond its initial role as a USDC distributor. A recent Bernstein research report highlights Coinbase’s multifaceted approach to expanding USDC utility, revealing a significant contribution to its revenue growth.
The report emphasizes Coinbase’s strategic partnerships and initiatives. The launch of Coinbase Payments, integrated with Stripe and Shopify, and Coinbase Business, targeting smaller companies and startups, both leverage USDC. Furthermore, Coinbase’s collaboration with Nodal Clear utilizes USDC as collateral in U.S. futures markets, expanding its reach into derivatives.
Coinbase’s Base blockchain plays a crucial role, having processed a staggering $6.8 trillion in USDC-related settlement volume year-to-date and hosting over $3.7 billion in USDC. This substantial volume underscores the increasing reliance on USDC for various financial transactions.
The financial implications of Coinbase’s strategy are significant. The company’s direct equity stake in Circle, the issuer of USDC, and a revenue-sharing agreement have yielded substantial returns. This agreement grants Coinbase 100% of the interest income from USDC held directly on its platform, with a 50/50 split for off-platform USDC. This revenue stream has propelled Coinbase’s non-trading revenue from $181 million in 2020 to $2.8 billion in 2024, now representing 42% of total revenue.
This dramatic increase in non-trading revenue highlights the strategic importance of stablecoins to Coinbase’s long-term growth. The company is actively fostering USDC adoption across payments and decentralized finance (DeFi), establishing it as a key driver of future growth beyond its traditional trading activities. This strategic focus is reflected in Bernstein’s “outperform” rating for Coinbase, with a price target of $510, alongside a similar rating for Circle at $230. The report concludes that Coinbase’s transformation into a key player in the stablecoin ecosystem is significantly undervalued by the market.
