The stablecoin market is entering a phase of instability. JPMorgan analysts have revised their revenue forecasts for Circle and Coinbase, pointing to a new partnership structure with Hyperliquid as a key risk factor. In my assessment, this is the first serious signal that the traditional revenue distribution model for USDC is cracking.
Changing the Rules of the Game
In May, Coinbase and Circle changed the terms of their cooperation with Hyperliquid. Now, the US exchange treats USDC held on the perp-DEX as assets "on the platform" and earns income from the reserves of these funds. However, 90% of this amount is immediately passed on to Hyperliquid. Previously, according to JPMorgan, Coinbase shared this income almost equally with Circle.
Hyperliquid holds $6 billion in USDC — about 8% of the token's total circulating supply. The exchange leads among decentralized platforms for perpetual futures trading, with its July trading volume exceeding $150 billion, accounting for 11.5% of Binance's volumes. This is a massive concentration of capital in one place.
A "Prisoner's Dilemma" for Issuers
JPMorgan called the new scheme a "prisoner's dilemma" for Circle and Coinbase. The gist is that both companies are now forced to compete for USDC distribution, undermining their previous synergy. Additional pressure comes from the weakening crypto market: since March, the circulating supply of USDC has shrunk from $80 billion to $73 billion, and the total market capitalization of the stablecoin sector has lost $10 billion since May.
Nevertheless, in the long term, high interest rates may partially offset losses from USDC reserves. However, in my view, this is only a temporary anesthetic, not a solution to the structural problem.
Japanese Expansion Vector
Amid these alarming signals, Circle continues its geographic expansion. 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 using USDC for cross-border payments, domestic settlements, and payments for goods at Japanese merchants, including tourists.
JCB serves about 140 million cardholders and over 40 million merchant locations worldwide. Previously, Circle announced a joint project with Nomura to launch a USDC-based currency settlement service for local companies by 2027.
My professional opinion: The Hyperliquid deal is a classic example of how excessive reliance on a single large partner can turn into a strategic vulnerability. While Circle and Coinbase fight over the revenue share from USDC, Hyperliquid effectively dictates the terms. The Japanese expansion is a logical step for diversification, but it takes time and will not solve current profitability issues. The stablecoin market is entering an era where control over asset distribution becomes more important than issuance.