The stablecoin market is entering a phase of structural restructuring. A new partnership agreement between Circle, Coinbase, and the decentralized exchange Hyperliquid has triggered a serious reassessment of the prospects for USDC's issuer and its strategic ally. Analysts at one of the world's largest investment banks have revised their forecasts for the profitability of both companies, pointing to fundamental risks in the stablecoin revenue distribution model.
The Essence of the Changes
In May of this year, Circle and Coinbase updated their cooperation terms with Hyperliquid. Now, the American exchange Coinbase considers USDC placed on the perp-DEX as an asset "on the platform" and receives income from the reserves of these funds. The key nuance: 90% of this income is transferred by the platform to Hyperliquid. Previously, according to analysts, Coinbase shared the income almost equally with Circle, which provided the issuer with a stable stream of commissions.
Hyperliquid holds about $6 billion in USDC on its balance sheet — roughly 8% of the total circulating supply of the token. The exchange confidently dominates the segment of decentralized perpetual futures trading, and its share of trading volumes relative to Binance has reached 11.5%. In July, the platform's trading volume exceeded $150 billion, confirming its systemic importance for the entire crypto market.
The "Prisoner's Dilemma" for Issuers
Experts have called the current situation a "prisoner's dilemma" for Circle and Coinbase. The new agreement creates a precedent where companies are forced to compete for USDC distribution rather than coordinate efforts to maximize revenue. This weakens the bargaining positions of both entities with major counterparties like Hyperliquid.
Additional pressure comes from the general slowdown of the crypto market. Since March, the volume of USDC in circulation has decreased from $80 billion to $73 billion, and the total market capitalization of the stablecoin sector has fallen by $10 billion since May. Despite this, analysts note that in the long term, higher interest rates could partially offset the loss of income from USDC reserves.
Expansion into Japan
Against this backdrop of difficulties, Circle continues to aggressively expand the geographic use of USDC. On July 14, Japan's largest payment system JCB and Circle signed a memorandum of understanding to develop stablecoin-based solutions. The companies plan to explore the possibility of using USDC for cross-border payments, domestic settlements, and payments for goods at Japanese merchants, including tourists. The first phase will be a pilot for internal fund transfers at JCB, which serves about 140 million cardholders and over 40 million merchant locations worldwide.
At the end of June, Circle also announced a joint project with Japanese financial corporation Nomura to launch a currency settlement service based on USDC for local companies. The launch is scheduled for 2027.
My comment: The partnership with Hyperliquid is a classic example of how growing decentralized infrastructure is beginning to dictate terms to traditional issuers. Circle and Coinbase have become hostages to their own success: the more USDC is used on Hyperliquid, the less control they retain over the economics of its distribution. Japan is a promising market, but it will not solve the problem of the current revenue model. Investors should closely watch whether Circle can diversify its revenue without falling into new "prisoner's dilemmas."