Stablecoin infrastructure shifts revenue from Coinbase to Circle

Transaction costs for cross-border B2B payments can be reduced to fractions of a cent per transaction. This reduction is driven by programmable money that handles payment complexity at the money layer rather than through intermediaries. Circle is positioned to capture this shift as stablecoins gain traction in these real-world applications. In contrast, Coinbase's revenue model is more volatile due to its reliance on trading fees from users buying or swaping crypto assets. U.S. regulatory changes regarding stablecoin rewards are expected to shift the economics of the crypto ecosystem. These changes could alter the revenue-sharing agreement between Coinbase and Circle in a way that favors Circle and pressures Coinbase's top line. This process will reduce Coinbase's share of reserve interest from USDC.