Coinbase is transforming its role with USDC, not just as a distributor but as an active promoter in payments and financial services, asserted Wall Street broker Bernstein in a recent report.
Key Points:
- Coinbase is developing USDC infrastructure to accelerate adoption in e-commerce and small business sectors, as noted in a report released by Bernstein.
- The company is forming strategic alliances with platforms like Stripe, Shopify, and Nodal Clear to enhance USDC’s utility in merchant transactions and U.S. futures markets.
- Revenues from stablecoins are becoming significant for Coinbase, comprising 42% of its total revenue in 2024, highlighting a shift towards non-trading income.
Recently, Coinbase unveiled Coinbase Payments, developed with Stripe and Shopify, and has introduced Coinbase Business, targeting small and startup businesses, both utilizing Circle’s USDC.
In derivatives, Coinbase allied with Nodal Clear to use USDC as collateral in U.S. futures markets. According to Bernstein, Coinbase’s Base blockchain has hosted over $3.7 billion in USDC and has processed a settlement volume of $6.8 trillion in USDC transactions for the year so far.
Coinbase also holds a direct equity stake in Circle (CRCL), the issuer of USDC, with a revenue-sharing agreement in place. Under this new agreement, Coinbase receives 100% of the interest income from USDC held on its platform, while for off-platform holdings, revenues are split equally with Circle.
Stablecoins, whose values are tethered to assets like the U.S. dollar or gold, play a crucial role in the crypto landscape and facilitate international money transfers. As noted by Bernstein, revenues from stablecoins are a rising contributor to Coinbase’s earnings, which surged from $181 million in 2020 to $2.8 billion in 2024. This trend indicates Coinbase’s commitment to expanding USDC’s functionality within payments and decentralized finance (DeFi), laying the groundwork for long-term growth beyond traditional trading activities.
Bernstein has given an outperform rating for both Coinbase and Circle, with set price targets of $510 and $230 respectively.
