Analysts see strong upside in Coinbase stablecoins

The projection is being debated in Washington as lawmakers weigh whether to tighten restrictions on paying rewards linked to stablecoin holdings, a change that banks have pushed for and crypto firms have resisted in negotiations over broader digital-asset market structure legislation.

Coinbase’s stablecoin revenue has been driven mainly by USDC balances held on and off its platform and by interest rates earned on reserves backing stablecoins. In its Q4 2025 shareholder letter, Coinbase said stablecoin revenue was $364 million, up 3% quarter over quarter, helped by an 18% quarter-over-quarter rise in average USDC held in Coinbase products to $17.8 billion – an all-time high. Coinbase also reported average off-platform USDC balances of $58.4 billion and an average USDC market capitalization of $76.2 billion for the quarter.

Coinbase has been embedding USDC across its consumer and institutional products while treating stablecoins as a core growth priority. On its Q4 2025 earnings call, the company said USDC reached an all-time high market cap of about $75 billion and described “scaling stablecoins and payments” as one of its top priorities for 2026, alongside efforts to preserve the ability to pay stablecoin rewards to customers.

The policy fight centers on what kinds of yield or rewards are permitted. A legal analysis of the GENIUS Act framework describes a prohibition on stablecoin issuers offering “interest or yield” to stablecoin holders, while noting that the statute does not explicitly bar affiliate or third-party arrangements that might offer interest-bearing products. That boundary has become a focal point as lawmakers consider whether market structure legislation should extend limits beyond issuers to platforms that pass through economics tied to stablecoin reserves.

At the same time, the White House has promoted the GENIUS Act as part of a broader push to establish federal rules for stablecoins and digital assets. The open question for Coinbase investors is how much stablecoin economics can expand if stablecoins gain more traction in everyday payments – and how much of that potential is constrained if lawmakers narrow what rewards can be paid for holding stablecoins.

Coinbase’s latest financial disclosures show stablecoins already acting as a cushion when trading activity slows. The company’s Q4 2025 shareholder letter attributes stablecoin revenue growth to rising USDC balances, while also noting that lower effective interest rates on reserves partially offset those tailwinds after rate cuts late in the year.