Circle Internet Group said on Aug. 5 that its Coinbase USDC agreement had renewed on existing terms, keeping the stablecoin at the center of the U.S. exchange’s products.
Summary
- Circle renewed its Coinbase USDC agreement on existing terms for three additional years through 2029.
- USDC circulation reached $73.3 billion, rising 19% from the same quarter last year despite weakness.
- Circle generated $701 million in quarterly revenue and reserve income, up 7% year over year.
- Circle rejected quarterly dividends, favoring reinvestment in products, distribution partnerships and strategic opportunities over payouts.
- Coinbase held 30% of USDC circulation on its platform at the quarter’s end in June.
Circle confirmed the renewal during its second quarter 2026 earnings call.The agreement’s initial term began in August 2023. Circle’s collaboration agreement filed with the Securities and Exchange Commission provides for automatic three year renewals when both companies continue meeting their contractual obligations. The latest renewal therefore extends the arrangement into 2029.
Chief Financial Officer Jeremy Fox Geen also said Circle had no plan to introduce quarterly dividends. Management intends to retain capital for products, infrastructure and other strategic opportunities rather than begin regular shareholder payouts.
Circle and Coinbase preserve their USDC economics
Circle and Coinbase established their current commercial arrangement on Aug. 18, 2023, after closing the Centre Consortium structure that had previously governed USDC. Coinbase received a minority ownership interest in Circle, while Circle assumed sole responsibility for issuing and governing USDC.
Under the filed collaboration agreement, Coinbase supports USDC across its products and receives payments linked mainly to income earned from the assets backing the stablecoin. Circle retains an issuer allocation before the remaining income is divided according to where USDC balances are held. Coinbase also receives part of the reserve income generated by USDC held outside either company’s platform.
The arrangement makes Coinbase more than an exchange listing USDC. Circle reported that 30% of USDC circulation was held on Coinbase’s platform at the end of the second quarter. By comparison, Circle held $12.4 billion, or 17% of circulation, within its own platform infrastructure.
USDC circulation reached $73.3 billion at quarter end, up 19% from a year earlier. Circle’s total revenue and reserve income rose 7% to $701 million, although a lower reserve return rate offset part of the benefit from circulation growth.
New partners can still join the USDC network
The renewed Coinbase USDC agreement does not prevent Circle from signing other distribution arrangements. Circle said it had more than 150 partners with economic incentives to integrate, distribute and support USDC across exchanges, wallets, payment applications and financial platforms.
Circle and Coinbase have also cooperated on third party agreements. Circle moved about $4.4 billion in USDC to a Coinbase linked address through HyperEVM after Coinbase became Hyperliquid’s USDC treasury deployer. Arkham described it as the largest recorded USDC transfer at the time.
Circle later said approximately 90% of Hyperliquid’s USDC was held within Coinbase’s platform at the end of the quarter, while around 10% remained on Circle’s platform. However, management declined to disclose how the three companies divide the associated reserve income.
In related coverage, JPMorgan warned that the Hyperliquid agreement could pressure Circle and Coinbase’s margins. The bank’s estimates are external forecasts and not figures confirmed by either company.
Circle rejects quarterly dividends to fund growth
Fox Geen said Circle wanted to maintain a strong balance sheet that could support investment during different market conditions. He also said retained capital would allow the company to pursue strategic opportunities when they arise.
Circle believes shareholder returns from reinvesting in its platform will be “far greater” than returns from quarterly dividends, according to Fox Geen.
The claim is forward looking and is not a guaranteed return. Product execution, interest rates, regulation, competition and distribution expenses will determine whether the strategy produces the outcome management expects.
The position is consistent with Circle’s latest annual report. The company said it had not declared or paid cash dividends and did not expect to do so in the foreseeable future. Its board may still reconsider the policy based on Circle’s financial condition, capital requirements and other business factors.
For U.S. investors, the decision confirms that Circle continues to present itself as a growth company rather than an income stock. Circle began trading on the New York Stock Exchange in June 2025 after pricing its initial public offering at $31 per share.
U.S. regulation strengthens Circle’s investment case
Circle’s capital allocation decision comes as it invests in regulated U.S. infrastructure. In July, the company received final approval from the Office of the Comptroller of the Currency to establish Circle National Trust.
As previously reported, Circle National Trust will initially provide custody services to Circle and its affiliates. Its approved plan may later support institutional custody and management of assets backing USDC, although Circle has not confirmed when those services will begin.
The OCC is also developing rules to implement the GENIUS Act. Its proposed stablecoin framework covers reserves, redemption, custody, capital, audits, supervision and issuer applications. Circle therefore faces continued compliance spending as the federal system moves from legislation toward operating rules.
Meanwhile, distribution remains one of Circle’s largest expenses. The company recorded $330.6 million in Coinbase related distribution costs during the first quarter of 2026, compared with $303.2 million a year earlier. Circle said these expenses could increase as reserve income grows and it adds more distribution partners.
Circle reported $460.6 million in distribution and transaction costs during the fourth quarter against $733.4 million in reserve income. Those figures show why investors monitor not only USDC circulation, but also how much reserve income Circle retains after paying major partners.
What happens next
The renewal removes an immediate source of uncertainty surrounding Circle’s most important commercial relationship. Investors will now watch future SEC filings for any additional disclosure about the renewed term, distribution costs or changes to the agreement.
Circle’s dividend policy could also change later, but only through a future board decision. For now, management plans to direct available capital toward USDC distribution, regulated infrastructure, payments and new products rather than quarterly payouts.
