A new agreement between Circle, Coinbase, and Hyperliquid is expected to negatively impact the stablecoin USDC and pose risks for the companies, according to JPMorgan analysts, as reported by CoinDesk.
What Happened
In May, Coinbase and Circle updated their collaboration terms with Hyperliquid. The American exchange now considers USDC on perp-DEX as an asset “on platform” and earns revenue from the reserves of these funds. The platform then transfers 90% of this amount to Hyperliquid.
According to JPMorgan specialists, Coinbase previously shared revenue with Circle almost equally.
Hyperliquid holds $6 billion in USDC, about 8% of the token’s circulating supply. The exchange is among the largest trading platforms in the crypto industry and leads among decentralized perpetual futures exchanges. In July, trading volume on the platform exceeded $150 billion, and its share relative to Binance grew to 11.5%.
Analysts’ Opinion
JPMorgan described the new arrangement as a “prisoner’s dilemma” for Circle and Coinbase. Consequently, the bank lowered its profit forecasts for both companies.
“The change in relations with Hyperliquid highlights the issue of partnership agreements between Circle and Coinbase. It could create a ‘prisoner’s dilemma’ and force the companies to compete for USDC distribution,” the experts noted.
Analysts also cited the weakening crypto market as an additional pressure factor. Since March, Circle’s stablecoin circulation has decreased from $80 billion to $73 billion. The market capitalization of the entire stablecoin sector has shrunk by $10 billion since May.
However, JPMorgan emphasized that in the long term, higher interest rates could partially support USDC reserve income.
USDC Expansion in Japan
On July 14, Japan’s largest payment system, JCB, and Circle signed a memorandum of understanding to develop stablecoin-based solutions.
The companies will explore the use of USDC for cross-border payments, domestic settlements, and payments for goods by Japanese merchants, including tourists. The first phase will be a pilot for domestic fund transfers within JCB.
According to the partners, stablecoins could reduce costs for international transactions, increase settlement speed, and simplify payments for foreign visitors who currently rely on bank cards with set limits.
JCB serves approximately 140 million cardholders and over 40 million merchants worldwide.
At the end of June, Circle announced plans with Japanese financial corporation Nomura to launch a USDC-based currency settlement service for local companies, set to start in 2027.
Earlier, in May, Christoph Hock, head of tokenization and digital assets at Union Investment, warned of a potential liquidity crisis for Tether and Circle.
