A new agreement between USDC issuer Circle, the Coinbase exchange, and the Hyperliquid platform has raised serious concerns within the investment community. Leading analysts at JPMorgan have revised their revenue forecasts for both companies, pointing to fundamental changes in the USDC stablecoin economy.
Nature of the Changes
In May of this year, the terms of cooperation were significantly revised. USDC funds placed on the decentralized perpetual futures exchange Hyperliquid are now considered assets held "on the Coinbase platform." This allows the exchange to earn income from the reserves of these funds. However, the key point is that 90% of this income is transferred back to the platform by Hyperliquid. Previously, according to monitoring data, Coinbase shared this income almost equally with Circle.
Scale of Impact
Hyperliquid holds approximately $6 billion in USDC, representing about 8% of the total token supply in circulation. The platform is one of the leaders in the crypto industry by trading volume, particularly in the decentralized exchange segment. In July, Hyperliquid's trading volume exceeded $150 billion, and its share relative to Binance grew to 11.5%.
"Prisoner's Dilemma" for Issuers
JPMorgan analysts characterized the new arrangement as a "prisoner's dilemma" for Circle and Coinbase. In their view, the change in partnership terms with Hyperliquid demonstrates the vulnerability of both companies' business models. They may now become embroiled in a competitive struggle for USDC distribution, which will put pressure on their margins.
An additional negative factor is the overall weakening of the crypto market. Since March, the circulating supply of USDC has decreased from $80 billion to $73 billion. The total market capitalization of the stablecoin sector has fallen by $10 billion since May. However, it is worth noting that in the long term, higher interest rates may partially offset losses from declining volumes.
Japanese Vector
Against this backdrop, Circle continues its expansion into Asia. Japan's largest payment system, JCB, has signed a memorandum of understanding with the issuer. The companies plan to develop solutions based on stablecoins for cross-border payments and domestic settlements. The first phase will be a pilot project for fund transfers within JCB. Additionally, Circle, together with Japanese corporation Nomura, intends to launch a currency settlement service based on USDC for local companies by 2027.
My Expert Opinion: The situation with Hyperliquid is a vivid example of how decentralized platforms are beginning to dictate terms to major traditional players. Circle and Coinbase, long synonymous with stability and reliability in the industry, are now forced to make concessions to maintain market share. This is a worrying signal for the entire stablecoin ecosystem, which could lead to a reassessment of current business models and increased competition for liquidity.