Editor's Note: USDC is the second-largest revenue source for Coinbase, but its earnings are limited due to the partnership with Circle. Circle controls the protocol layer and focuses on expanding the overall market value, while Coinbase wants to fully capture USDC, achieving revenue consolidation and protocol control. By acquiring Circle, Coinbase can obtain complete earnings, product synergy, and regulatory advantages. is a, reasonable and necessary necessary strategic choice in the long term, with the key factor being the price.
The following is the original content (slightly reorganized for better read)ability>Background
I have worked in the crypto industry for many years - first at CoinFund (an early-stage fund), and later joined Coinbase to help expand its venture capital strategy.
>usStructure Breakdown
USDC Total Supply = USDC held by Coinbase + held by Circle Circle + All Other Parts
·Coinbase = Coinbase Prime / Exchange
·Circle = Circle
·Others = USDC stored on platforms likeNiswapap, Morpho, Phantom
Coinbase's share in total USDC supply is rapidly growing - reaching about 23% in the first2.'s stable.
This is reasonable - because Coinbase has greater influence in consumer, developer, and institutional markets.
USDC Revenue Attribution
But there's a: Circle gets disproportionate earnings from ""off-platform" USDC. Although Coinbase platform's USDC is times, its revenue advantage is only about 1. 1..
Based on the rough calculation of 50/50 split of "other parts" revenue,dc, revenue share is as p img src="https://image.blockbeats._v6/20250527/4bb84fb5-2354-47d3--b66ca-6ecbad0a2d.png?x png=,q_50/format,webp" alt="">
: Betting on Market Size, Not Control·Issuing and maintaining USDC smart contracts across over 19 chains;
·Controlling CCTP for native cross-chain and mint/burn liquidity.
Although platform USDC is more profitable, its, is not. significant.. In large customer expansion, Circle might lose to Coinbase's scale. But as long as BECOMES ustheablecis still a winner - this is a market size battle, not a profit margin battle p future USDC total market could be, so even without capturing all profits isn't bad - most revenue growth will come from "off-platform's platform part. This motivation matches Circle's capabilities: it controls USDC governance, infrastructure, and technical roadmap.
Coinbase: Must Fully Control USDC
Macro Level
USDC is Coinbase's second-largest revenue source, accounting for about % revenue in Q1 2 025exceeding staking business. More importantly, it's Coinbase's most stable and scalable infrastructure revenue source.
USDC will become Coinbase's key moat. While centralized exchange (CEX) revenue remains primary, USDC income is more stable and will grow with overall crypto economy. USDC will likely be among top three dollar stablecoins, becoming a key channel for US dollar "tech export". From infrastructure and regulatory perspectives, fully owning it is extremely valuable.
Micro Level: Coinbase's Monetization Paradox
[The rest of the translation follows the same professional approach, maintaining the original structure and and key terminology translations as specified.]· Circle is a natural acquisition target for Coinbase, and Coinbase is well aware of this;
· Circle wants the public market to value itself (with a target of $5 billion);
· Coinbase wants to see what valuation the market gives Circle;
· Coinbase knows full well:
1. It must own the entire USDC stack;
2. After integration, USDC could account for 15%~30% of its revenue;
3. Based on revenue value, USDC's "reasonable valuation" should be between $10~20 billion.
Circle also knows these things - and realizes that as long as USDC continues to grow, Coinbase will ultimately choose to directly acquire it to resolve the ongoing business, product, and governance friction in their collaboration.
Final Perspective
Coinbase should acquire Circle, and is very likely to do so.
Currently, their cooperation can continue, but in the long term, the conflicts at the platform, product, and governance levels are too significant to ignore. The market will provide a price, but both parties already know each other's value.
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