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Circle, the company behind the USDC stablecoin, paid Coinbase $908 million in distribution costs and revenue sharing during 2024. That figure represents roughly 54% of Circle’s total revenue for the year, making Coinbase less of a distribution partner and more of a landlord collecting majority rent.
The arrangement, formalized through a Collaboration Agreement that took effect on August 18, 2023, is approaching its first major renewal window in August 2026.
The economics of a lopsided partnership
Coinbase earns 100% of the reserve interest generated on USDC held directly on its platform. For USDC held anywhere else in the world, Coinbase still collects 50% of that interest income.
For Coinbase, stablecoin-related revenue is projected to reach approximately $1.35 billion in 2025. USDC-related activities accounted for roughly 13.8% of Coinbase’s total revenue in 2024, a figure large enough that any disruption to the partnership would show up clearly in quarterly earnings.
How we got here
The current arrangement replaced a previous structure called the Centre Consortium, a joint venture that both companies operated together. When they restructured in August 2023, Circle took sole governance and issuance control of USDC.
As part of that restructuring, Coinbase also took an equity stake in Circle. The Collaboration Agreement runs on an initial three-year term through August 2026, with automatic three-year renewals that depend on performance metrics.
Coinbase’s wandering eye
In June 2026, Coinbase endorsed Open USD, a rival stablecoin project. The market reaction was swift: Circle’s stock price dropped more than 17%.
What this means for investors
The August 2026 renewal window is the most important date on the calendar for anyone with exposure to either company or to USDC itself. A renegotiation that shifts more revenue toward Circle would hurt Coinbase’s stablecoin income, while a deal that maintains the current structure keeps Circle’s margins under pressure.
For Coinbase investors, the $1.35 billion in projected stablecoin revenue for 2025 represents a substantial revenue stream. Stablecoin demand tends to persist even during bear markets, since traders use stablecoins to park capital, making this revenue line more resilient than Coinbase’s trading fee income.
If Coinbase actively promotes rival stablecoins on its platform, the 50% revenue share on off-platform USDC becomes less valuable as total USDC circulation potentially shrinks. Circle would then face the worst of both worlds: paying high distribution costs on a shrinking asset base.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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