Coinbase is increasing its share of the USDC stablecoin rapidly, with around 23 percent of the total supply expected by 2025 Q1. This further signifies the company’s stretcher in the stablecoin market as it makes USDC Coinbase’s second major revenue source after trading.
Coinbase has built trust among consumers and institutions for years and has now become a powerhouse in the stablecoin industry. The larger USDC ecosystem is divided into three distinct segments: custodial assets held by Coinbase, platform assets held by Circle, and assets in decentralized wallets.
Coinbase manages its share through its Prime and Exchange platforms, whereas Circle maintains its Mint service to ensure they both have a steady market share. The rest, which is in DeFi apps like Uniswap and Phantom, adds up to the earnings of both companies in a proportional manner.
Coinbase earns full revenue on the USDC it holds in its platform but only half of the earnings off the platform, which it shares with Circle. Though Coinbase has four times more USDC on-platform, its revenue advantage over Circle is only 1.3 times higher. Circle earns from off-platform reserves because it owns and has distribution rights at the protocol level.
Coinbase gains value acquiring Circle stack
Circle focuses on expanding total USDC use, regardless of where users hold the tokens. The company maintains protocol-level assets, like smart contracts and cross-chain bridging tools, across more than 19 networks.
Circle’s revenue from platform-held tokens is limited. However, its infrastructure role offers long-term value and stability in the growing USDC ecosystem. Coinbase views USDC as foundational to its future revenue and global financial influence.
It has already made USDC its most stable source of revenue and intends to further its use through initiatives such as Base and Wallets. Yet, non-custodial user holdings constrain the firm and diminish its ability to capture revenue.
Buying Circle removes those limits and gives Coinbase full access to USDC revenues, regulatory clarity, and control over the protocol.
With Circle reportedly seeking a valuation between $10 billion and $20 billion, and Coinbase’s market cap hovering around $70 billion, the deal could reshape the future of digital finance across the globe.
