JPMorgan analysts have revised their financial forecasts for Circle and Coinbase, pointing to a new threat from the Hyperliquid platform. The reason was an update to the partnership agreement, which, according to experts, creates structural risks for the USDC stablecoin and its issuers.
A Deal That Changes the Rules of the Game
In May, Coinbase and Circle changed the terms of their cooperation with Hyperliquid. Now the U.S. exchange considers USDC held on the decentralized perpetual futures exchange (perp-DEX) as assets "on the platform." This allows Coinbase to earn income from the reserves of these funds, after which 90% of this amount is transferred to Hyperliquid. Previously, according to JPMorgan, the income was split almost equally between Coinbase and Circle.
Hyperliquid holds about $6 billion in USDC — roughly 8% of the total token supply in circulation. The platform is among the largest trading venues in the crypto industry and dominates among decentralized perpetual futures exchanges. In July, Hyperliquid's trading volume exceeded $150 billion, and its share relative to Binance grew to 11.5%.
A "Prisoner's Dilemma" for Circle and Coinbase
JPMorgan called the new scheme a "prisoner's dilemma" that undermines the traditional partnership between the USDC issuer and the exchange. "The change in the relationship with Hyperliquid highlights the problem with Circle and Coinbase's partnership agreements. It could force the companies to compete for USDC distribution," the analysts emphasize.
Additional pressure comes from the weakening crypto market. Since March, the supply of USDC in circulation has shrunk from $80 billion to $73 billion. The market capitalization of the entire stablecoin sector has decreased by $10 billion since May. However, JPMorgan notes that in the long term, high interest rates could partially support income from USDC reserves.
The Japanese Vector: New Horizons for USDC
Despite negative signals, Circle is actively expanding its presence in Asia. On July 14, Japan's largest payment system, JCB, signed a memorandum of understanding with Circle to develop stablecoin-based solutions. The companies will explore the use of USDC for cross-border payments, domestic settlements, and payments for goods from Japanese merchants, including tourists. The first phase is a pilot for domestic fund transfers at JCB.
JCB serves approximately 140 million cardholders and over 40 million merchant locations worldwide. At the end of June, Circle also announced plans to launch a USDC-based currency settlement service for local companies in partnership with Japan's Nomura, set to start in 2027.
My comment: The situation with Hyperliquid demonstrates how the growth of DeFi infrastructure can undermine the established business models of stablecoin issuers. Circle and Coinbase have found themselves trapped by their own success: Hyperliquid, using their own assets, dictates terms, which will inevitably impact margins. The Japanese expansion is an attempt to diversify risks, but it takes time, and the pressure on USDC is already tangible.