The largest players in the crypto industry — Circle and Coinbase — have found themselves in a difficult situation after revising the terms of their partnership with the Hyperliquid platform. JPMorgan analysts have lowered their profit forecasts for both companies, pointing to structural risks for the USDC stablecoin. The core issue lies in a new revenue distribution model that essentially places the issuer and the exchange in a competitive position against each other.
The Essence of the Conflict of Interest
In May, Coinbase and Circle updated their agreement 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, but then 90% of that amount is transferred to Hyperliquid. Previously, I recall, Coinbase shared this income almost equally with Circle.
Hyperliquid, in turn, holds about $6 billion in USDC — roughly 8% of the total token supply in circulation. The platform confidently leads among DEXs in perpetual futures trading volume, and in July its turnover exceeded $150 billion. Hyperliquid's share relative to Binance reached 11.5%, making it one of the key distribution channels for the stablecoin.
The "Prisoner's Dilemma" for the Issuer and the Exchange
JPMorgan characterized the new scheme as a "prisoner's dilemma" for Circle and Coinbase. The change in partnership forces the companies to compete for USDC distribution, undermining their joint synergy. An additional pressure factor has been the weakening of the crypto market: since March, the volume of USDC in circulation has dropped from $80 billion to $73 billion, and the market capitalization of the entire stablecoin sector has decreased by $10 billion since May.
Nevertheless, JPMorgan analysts note that in the long term, high interest rates may partially offset the loss of income from USDC reserves. However, the current situation clearly indicates that Circle and Coinbase need to reconsider their strategy for interacting with major platforms to avoid losing control over their own product.
USDC in Japan: New Horizons
Amid these challenges, Circle continues its expansion into Asia. On July 14, Japan's largest payment system, JCB, signed a memorandum of understanding with the issuer to develop solutions based on stablecoins. The companies will explore the possibility of using USDC for cross-border payments, domestic settlements, and payments for goods at Japanese merchants, including by tourists. The first step will be a pilot for internal fund transfers at JCB.
JCB serves about 140 million cardholders and over 40 million merchant locations worldwide. At the end of June, Circle announced a joint project with Japan's Nomura to launch a currency settlement service based on USDC, which is planned to launch in 2027.
My comment: The deal with Hyperliquid is a vivid example of how decentralized platforms are beginning to dictate terms to traditional giants. Circle and Coinbase, in their pursuit of scaling, risk losing the profitability of their key product. Expansion into Japan is the right move, but it will not solve the fundamental problem: USDC is becoming a hostage to the interests of large traders rather than a tool for mass adoption. The stablecoin market is entering a phase of fierce competition, and only those who can maintain the independence of issuance will survive.