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Revenue from its stablecoin offerings grew smartly in the second quarter for cryptocurrency platform provider Coinbase Global Inc. against a backdrop of a tough digital currency market.
New York City-based Coinbase reported Thursday that it posted $332.5 million in stablecoin revenue, up 38% from $240.4 million in the year-earlier quarter. Stablecoins are cryptocurrencies pegged to match the value of fiat currencies, such as the U.S. dollar or euro, and thus avoid the wide swings in value characteristic of much of the digital-currency market. Coinbase and Circle Internet Group in 2018 teamed up to offer USDC, a dollar-linked stablecoin.
Coinbase co-founder and chief executive Brian Armstrong said during a conference call Thursday the company’s main focus this year is its core businesses of trading blockchain-based assets and stablecoin payments. “We see payments as the next big use case in crypto and believe that the majority of all payments in the economy will eventually run on stablecoin rails because they are faster, cheaper, and global,” he said.
Coinbase claims USDC is the biggest dollar-denominated stablecoin, though analysts believe dollar-linked stablecoins will proliferate, especially now that President Donald Trump last month signed into law the GENIUS Act. The law creates the first-ever U.S. regulatory system for stablecoins. Armstrong nonetheless believes Coinbase is in a strong competitive position, saying on the call that the new law will spur “further innovation and adoption of stablecoins, and we are uniquely positioned because we have both the broadest distribution base for USDC and the best rewards program for customers.”
In June, Coinbase announced a new service called USDC on Base that will enable merchants of e-commerce services provider Shopify Inc. to accept USDC payments. Base is a low-cost Ethereum blockchain transaction service from Coinbase for software developers.
Despite the bright outlook for its stablecoin business, Coinbase reported total revenues of $1.5 billion for the quarter, down 26% from a year earlier. Transaction revenue of $764 million was down 39%. Trading volume was lower than analysts expected, in part because the crypto market was less volatile in the quarter. Net income of $1.43 billion jumped markedly because of one-time factors.
