Coinbase backs new stablecoin venture, renegotiates deal with Circle

Coinbase signed on as a launch partner in the Open USD consortium, a 140-plus member stablecoin initiative that includes Stripe, BlackRock, Visa, and Mastercard, while simultaneously preparing to renegotiate the revenue-sharing deal that has made its relationship with Circle one of the most profitable partnerships in digital assets.

Circle’s stock dropped roughly 17% on the news.

The deal that made Coinbase rich

Under the current revenue-sharing agreement established in 2023, Coinbase keeps 100% of the interest income generated by USDC reserves held on its platform. For USDC held elsewhere, Coinbase takes 50%.

Circle has reportedly paid over $908 million in distribution fees to Coinbase, with those fees accounting for more than half of Circle’s total revenue.

USDC currently holds a market cap of approximately $74 billion, making it the second-largest stablecoin, issued solely by Circle following the dissolution of the CENTRE Consortium.

The agreement is set for renegotiation in August 2026.

What Open USD actually does differently

The Open USD consortium, announced on June 30, 2026, imposes no mint or burn fees and offers majority reserve income sharing with its partners, contrasting with Circle’s issuer-centric USDC model in which Circle mints the coins, manages the reserves, and captures the majority of the economic upside from those reserves.

Circle’s increasingly uncomfortable position

Circle finds itself with a distribution partner diversifying into a competing product while that same partner is about to renegotiate the terms of their existing relationship. Circle has paid over $908 million in distribution fees to Coinbase, with those fees representing more than half of Circle’s total revenue.

If Open USD offers majority reserve income sharing to partners by default, Coinbase could potentially earn comparable or superior economics from promoting OUSD instead of USDC, giving it leverage ahead of the August 2026 renegotiation.

Circle’s 17% stock decline reflects investor concern about a company that derives more than half its revenue from distribution fees paid to a single partner that has now joined a rival consortium.

What this means for investors

For Coinbase shareholders, the Open USD partnership represents diversification away from heavy dependence on USDC-related revenue. For Circle, the path forward may require adapting its economic model to offer more competitive revenue sharing to distribution partners, or doubling down on regulatory positioning as legislation like the GENIUS Act and CLARITY Act continues to be debated in Washington.

The August 2026 renegotiation between Coinbase and Circle will be the first real test of this dynamic, with the outcome likely to signal whether USDC can maintain its position as the premier regulated stablecoin or whether the issuer-centric economic model is giving way to the consortium approach.

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