Coinbase Receives 50% of Circle’s USDC Reserve Revenue, IPO Filing Reveals

Coinbase Global is entitled to half of the residual revenue generated from reserves backing Circle’s USDC stablecoin, according to new disclosures in Circle’s S-1 filing with the U.S. Securities and Exchange Commission.

The filing, submitted Tuesday, offers a rare glimpse into the financial arrangement between two of the biggest players in the stablecoin market.

Circle confirmed that Coinbase receives 50% of what it calls the “residual payment base”—a portion of revenue derived from the reserve assets supporting USDC, a stablecoin pegged to the U.S. dollar.

Circle’s reserves are made up of highly liquid assets, including U.S. Treasuries and cash equivalents.

In 2024, Circle reported $1.7 billion in revenue and reserve income, with net income totaling $156 million. The company is positioning itself as a leader in the global transition to blockchain-based payments.

The agreement ties Coinbase’s share of the reserve revenue directly to the amount of USDC held on its platform.

The more USDC stored on Coinbase, the higher its share of the reserve income. If users hold their USDC elsewhere, Coinbase earns less.

USDC currently holds the position as the second-largest stablecoin by market capitalization, with approximately $60.1 billion in circulation, accounting for about 26% of the global stablecoin market, according to CoinGecko.

The stablecoin was initially launched in 2018 through the Centre consortium, jointly created by Coinbase and Circle.

Following the dissolution of Centre in 2023, Coinbase took an equity stake in Circle, further strengthening their partnership.

Coinbase now holds roughly 20% of all circulating USDC—up from just 5% in 2022—demonstrating its increasing role in USDC’s distribution and Circle’s earnings.

Circle earned ~$1.7b revenue in 2024 and paid out $900M+ to @coinbase as a distribution partner

That ~$1B going to Coinbase likely comes with little to no cost/opex to serve. At 10x earnings = $10 B mkt cap and likely contributes ~25% of $COIN valuation

For perspective -… pic.twitter.com/2Et3yaSgas

However, Circle’s filing also flagged the arrangement as a potential risk. The company noted that Coinbase’s policies and business decisions, which Circle does not control, could significantly affect distribution costs and revenue.

To diversify its exposure and reduce reliance on Coinbase, Circle is pushing for broader international adoption.

The firm highlighted recent partnerships with Grab in Singapore, Nubank in Brazil, and Mercado Libre across Latin America.

Circle plans to list on the New York Stock Exchange under the ticker symbol “CRCL,” though details on pricing and the IPO date have yet to be announced.

Kentucky has officially dismissed its lawsuit against Coinbase over the crypto exchange’s staking services, joining Vermont and South Carolina in reversing legal action against the company.

The case, originally centered on allegations that Coinbase’s staking program involved unregistered securities, was formally dropped on March 31.

The state’s decision comes just days after Governor Andy Beshear signed the “Bitcoin Rights” bill (HB701) into law.

The legislation, passed unanimously in both chambers, protects the rights of Kentuckians to self-custody digital assets, run blockchain nodes, and engage in crypto transactions without regulatory discrimination.

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