A new agreement between Circle, Coinbase, and the Hyperliquid platform is radically changing the economics of the USDC stablecoin and creating serious risks for both companies. This is the conclusion reached by JPMorgan analysts, who have revised their profit forecasts for USDC issuer Circle and the crypto exchange in light of these developments.
The Essence of the Changes
In May, Coinbase and Circle updated their terms of cooperation with Hyperliquid. The U.S. exchange now considers USDC held on the decentralized perpetual contract exchange (perp-DEX) as assets "on the platform" and receives income from the reserves of these funds. At the same time, 90% of this amount is passed on to Hyperliquid itself. Previously, according to experts, Coinbase and Circle split the income from USDC almost equally.
Hyperliquid currently holds approximately $6 billion in USDC — about 8% of the total token supply in circulation. The platform is among the largest trading venues in the crypto industry and confidently leads among decentralized perpetual futures exchanges. In July, Hyperliquid's trading volume exceeded $150 billion, and its share relative to Binance reached 11.5%.
A "Prisoner's Dilemma" for Issuers
JPMorgan described the new scheme as a "prisoner's dilemma" for Circle and Coinbase. According to analysts, this partnership forces the companies to compete for USDC distribution, undermining their mutual interests. An additional pressure factor is the weakening crypto market: since March, the volume of USDC in circulation has fallen from $80 billion to $73 billion, and the market capitalization of the entire stablecoin sector has decreased by $10 billion since May.
However, JPMorgan noted that in the long term, higher interest rates could partially offset losses from USDC reserves.
USDC Expansion in Japan
Against this backdrop, Circle continues to actively expand its geographic presence. On July 14, Japan's largest payment system, JCB, signed a memorandum of understanding with the USDC issuer. The companies plan to jointly develop solutions based on stablecoins for cross-border payments, domestic settlements, and payments for goods from Japanese merchants, including for tourists. The first phase will be a pilot project for internal fund transfers at JCB.
JCB serves approximately 140 million cardholders and over 40 million merchant locations worldwide. Previously, Circle also announced plans to launch a currency settlement service based on USDC for local companies in 2027, in partnership with Japanese financial corporation Nomura.
My comment: The deal with Hyperliquid is a vivid example of how DeFi platforms are beginning to dictate terms to traditional players. Circle and Coinbase find themselves in a vulnerable position: they are forced to share revenue to retain the largest holder of USDC. In the long term, this could lead to a revision of the entire model for distributing income from stablecoins, especially if Hyperliquid continues to increase its market share.