Quick overview

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Coinbase experienced increased investor interest since Circle’s successful listing. The token forms the core of much of the exchange’s stablecoin revenue, which grew by nearly 51% in the first quarter as USDC’s market value hit record highs.

Coinbase earns all interest income from USDC held directly on its platform under the current revenue-sharing agreement, while profits from USDC held off-platform (e.g., other platforms and exchanges) are divided equally between Coinbase and Circle.

It is uncertain whether this agreement will be renegotiated, as the companies renew it every three years, with the next renewal due in 2026. Both parties seem to view the agreement as a foundational partnership rather than a temporary arrangement.  Coinbase’s reach and distribution were crucial for USDC’s growth

 Bernstein analysts stated that Coinbase’s broad reach and distribution were essential for USDC to bootstrap liquidity, which has become a vital advantage for Circle moving forward.

Coinbase is also the largest institutional and retail exchange in the United States with a 67% market share, . Coinbase is expected to remain a major growth driver for USDC as trading activity and stablecoin innovations are increasingly adopted in the US, especially with the anticipated impacts of the GENIUS Act and CLARITY Act. On July 21, Coinbase will launch its perpetual futures product in the US, with USDC as the main collateral.

Bernstein further noted, “There are sufficient tailwinds for both partners to maintain this relationship throughout the long development of the crypto industry and USDC’s widespread adoption outside of the crypto ecosystem.”

Regarding new anchor partners, Bernstein considers Coinbase’s approach to Binance, the world’s largest cryptocurrency exchange with 270 million registered users, to be realistic. “We believe Coinbase would consider the economic sharing in a broader context of extending USDC dominance into payments beyond crypto markets, should Circle pursue new anchor partnerships with leading internet platforms (hypothetically),” Bernstein said

Accordingly, the partnership is likely to remain practical, aiming to boost USDC’s dominance and strengthen its network effects. Bernstein expects Coinbase’s revenue share to slightly decrease by 2027, reaching  50% as USDC’s market share expands within Binance and from increases in blockchain trading and financial services,