Hyperliquid Picks USDC as Its Core Stablecoin in Coinbase Deal to Unify On-Chain Liquidity

Key Takeaways:

• As no more AQAv2 treasury deployers are on the horizon, Hyperliquid will become the primary stablecoin for the United States Dollar (USDC).
• Both Coinbase and Circle will be locked up in HYPE, while Coinbase will also have the opportunity to purchase the USDH brand assets.
• The USDH will gradually be phased out and grants will be available to the developer to help with USDC migration.

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Hyperliquid is making a major shift in its stablecoin ecosystem, as it makes USDC the stablecoin’s settlement asset. The shift is part of a broader collaboration between Coinbase and Circle to help simplify liquidity and enhance protocol incentives.

Hyperliquid announced that Coinbase will activate AQAv2 using USDC as the treasury deployer, while Circle will serve as the technical deployer responsible for Cross-Chain Transfer Protocol (CCTP) infrastructure and native cross-chain connectivity.

Coinbase has announced its plan to activate AQAv2 on USDC as the treasury deployer, with Circle serving as the technical deployer responsible for CCTP and native cross-chain infrastructure. Both Coinbase and Circle have committed to stake HYPE to activate AQAv2. As part of this…

— Hyperliquid (@HyperliquidX) May 14, 2026

Not only do both companies provide the network with infrastructure, but also are pledging a long-term investment in its value by both staking HYPE and providing initial activation of its second alpha.

The transfer also features the incorporation of an agreement that will enable Coinbase to buy the brand assets for Native Markets by name of USDH. While specifics of the situation were not provided for this partnership, the arrangement clears space for USDC to become the most similar stablecoin to the protocol.

Coinbase will return 80% of the yield they receive from their reserves to the protocol, according to Hyperliquid. This fee-sharing structure aims not only to boost protocol incentives but also provide users with a deeply vended dollar-backed asset.

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In the process of going about 30% of the way to Hyperliquid, Native Markets features a first-of-its-kind partnership to pass its reserve yield directly to a protocol on-chain that is one of the very first stablecoins to be production-ready. The USDH brand will be phased out, with its geometric concepts playing a part in the design of AQAv2.

Users regularly reported that having multiple stablecoins adds to liquidity fragmentation and increases the difficulty of trading, the network said. This merger around USDC is likely to have a positive impact on execution, ease builder friction and unify the decentralised application experience.

The Hyper Foundation will provide grants to eligible HIP-1 deployers, HIP-3 deployers, and developers to ease the transition process, who integrated USDH in their applications.

The funding will be used to support migration efforts this upcoming month as infrastructure gets transitioned from projects to USDC.

Existing USDH markets will continue to be in operation through the transition period. According to Hyperliquid, USDH will continue to be fully backed and users will have the option to withdraw stablecoins USDH to the fiat or USDC without a fee during its sunset timeline.

The announcement also comes on the heels of a partnership first inked in early this year between Coinbase, Circle and Hyperliquid to speed the adoption of the USDC on the Layer-1 network and the decentralized exchange.

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