Key Takeaways
- Coinbase announced final approval for a national trust charter on Nov. 9, and it expects to issue and service stablecoins for other firms once OCC stablecoin rules take effect in January.
- That’s bad news for Circle, whose biggest cost is the share of USDC reserve income it pays Coinbase.
- In 2025, Coinbase took about $1.4 billion of Circle’s $2.64 billion of reserve income, more than Circle kept for itself.
- Circle’s contract with Coinbase runs through 2029, but its reserve income fell 8% last quarter.
Coinbase (COIN) said on Nov. 9 that the Office of the Comptroller of the Currency had given final approval for its national trust charter. Circle Internet Group (CRCL) has more to worry about than banks.
Coinbase is Circle’s biggest cost. In 2025, it took about $1.4 billion of the $2.64 billion Circle earned on the reserves behind USDC, its dollar stablecoin. A charter that lets Coinbase work with stablecoins directly gives it a stronger hand in the next talks on that split.
What the Charter Lets Coinbase Do
The charter brings the custody and trust work of Coinbase National Trust Company under OCC supervision. It’s noninsured: no FDIC-insured deposits or commercial loans. For Circle, the key date is January: once the OCC’s stablecoin rules take effect, Coinbase expects to handle issuance and servicing for other firms, Yahoo Finance reported. Bloomberg’s Olga Kharif said Coinbase could eventually issue a stablecoin of its own.
Coinbase Already Takes the Bigger Slice of USDC
Each company receives reserve-income allocations tied to USDC on its own platform, subject to Circle’s issuer retention and contractual adjustments. Coinbase also receives half the residual income after approved third-party payments.
Analysts already expect Circle’s earnings per share to fall by about half this year:
Even 2028’s $1.80 is below the $2.35 Circle earned in 2025, and that 2028 estimate was $3.07 at the end of June.
TIKR Tracks 29 Analysts on Circle. How Many Say “Buy”?
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Circle’s Pool Is Shrinking
Revenue slipped this year, apart from a one-time token sale in the September quarter:
Strip out $182 million of Arc token presale revenue, and third-quarter revenue was $683 million, down from $740 million a year earlier. Reserve income fell 8% to $658 million as the reserve return rate slid to 3.5%, and USDC in circulation ended September at $73.9 billion, flat from a year earlier.
What Circle keeps is thin: its margin after distribution costs ran 39.5%, 40.1%, 41.4% and 41.2% in the four quarters to June, then 52.4% in Q3, or 39.7% without the token sale.
Circle’s Contract Buys It Time
Circle confirmed on its Aug. 5 call that the Coinbase agreement renewed on existing terms, now running through 2029, and renews automatically while both meet their obligations. Circle also won its own national trust charter in July.
But a Coinbase that can issue and service stablecoins, or launch its own, walks into the next negotiation with a real alternative to USDC. Circle has little margin to give up, so the biggest risk in the stock just got bigger.
What Circle Needs to Show Next
About $1.4 billion a year is a lot for Coinbase to put at risk too, so I don’t expect a fight soon. Before betting the split moves Circle’s way, I’d want to see more USDC held on Circle’s own platform, where Circle keeps the income. Circle’s fourth-quarter results and 2027 outlook, due early next year, are the next check.
So What Is Circle Stock Actually Worth?
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Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
