Circle has renewed its commercial agreement with Coinbase under the existing terms, keeping USDC at the center of Coinbase’s products. The updated agreement also allows Circle to continue signing distribution deals with other strategic partners. It maintains the long-standing business relationship while supporting broader USDC availability across global financial markets.
Jeremy Fox-Geen, Circle’s Chief Financial Officer, said the company has no plans to introduce quarterly dividend payments for shareholders. Instead, it will continue directing available capital toward business expansion and strategic initiatives. Management expects this approach to generate stronger long-term returns than regular cash distributions.
USDC also continued to expand during the reporting period. Circle described it as the world’s second-largest dollar-backed stablecoin by market value. Its growing support across multiple blockchains, regulated operations, and strategic partnerships has helped increase its use in digital payments and financial services.
USDC Agreement Continues Under Existing Terms
Circle and Coinbase signed their commercial partnership agreement on August 18, 2023, following the closure of the Centre Consortium, which had previously overseen USDC. Under the arrangement, Circle became solely responsible for issuing and managing the stablecoin. Coinbase also acquired a minority ownership stake in Circle as part of the agreement.
As part of the partnership, Coinbase integrates USDC into its services and receives compensation largely from the returns produced by the stablecoin’s reserve assets. Circle receives its issuer allocation first, after which the remaining reserve revenue is distributed according to the location of USDC holdings.
In addition, Coinbase receives a share of the reserve earnings linked to USDC stored beyond the platforms of both companies.
USDC circulation reached $73.3 billion by quarter-end, reflecting a 19% increase from the same period a year earlier. Circle reported $701 million in revenue, including reserve income, during the quarter. However, lower returns on reserve assets offset some of the gains from the higher USDC supply.
Circle Broadens USDC Distribution Beyond Coinbase
Circle said the renewed partnership with Coinbase does not restrict its ability to sign future distribution deals. The company currently provides economic incentives to more than 150 partners to adopt, distribute, and support USDC. These partners include exchanges, wallets, payment applications, and financial platforms.
Coinbase remained a major part of USDC activity during the quarter. Circle reported that 30% of total USDC circulation was held on Coinbase’s platform at quarter-end. Circle’s own platform held $12.4 billion, representing 17% of the total circulation.
Circle and Coinbase also collaborated on third-party USDC activity. Following Coinbase’s appointment as Hyperliquid’s USDC treasury deployer, Circle transferred about $4.4 billion in USDC to a Coinbase-linked address through HyperEVM.
Nearly 90% of that USDC later remained on Coinbase’s platform, while about 10% stayed on Circle’s platform, although management did not disclose how the related reserve income is divided.
