Circle and Coinbase Are Turning ‘Boring’ Stablecoins Into Great News for Investors

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Shares of Circle Internet Group (CRCL) and Coinbase (COIN) both moved higher on Monday after the Treasury Department proposed new rules for the GENIUS Act, the stablecoin law enacted in July 2025. The proposal will be open to public comment for 60 days, with a final rule expected before January 2027.

Although stablecoins won’t suddenly become mainstream simply because the Treasury Department published its proposal, something more important has already happened.

Stablecoins are getting boring.

For most of crypto’s history, that would have sounded like an insult. Now, it may be stablecoins’ investment case.

The original crypto pitch involved overthrowing banks, replacing currencies, and cutting out financial intermediaries. Stablecoins are turning into something much less dramatic – a form of payments infrastructure. Mastercard (MA) is building around them. Payments app MoneyGram uses them. Businesses can settle payments at midnight on a Sunday instead of waiting for the banking system to open.

In short, stablecoins are becoming part of our ordinary world.

The GENIUS Act’s Impact on Stablecoins and Crypto Stocks

That leaves investors with a more useful question than whether crypto is “the future.” The question now is: If stablecoins become ordinary financial plumbing, who gets paid for it?

Circle and Coinbase have two very different answers…

A stablecoin such as Circle’s USDC is a digital dollar that can move across blockchain networks at any hour. The useful part of that idea has little to do with a person buying a cup of coffee… Electronic payment networks such as Mastercard and Visa (V) already handle those types of transactions just fine.

The bigger opportunity is where the existing system gets expensive or slow. Again, with traditional finance, those drawbacks happen with things like cross-border payments, remittances, corporate treasury, and settlement outside banking hours.

On stablecoin rails, the payment and settlement can become the same event rather than a message followed by money moving a day or two later. The hope is to fix these inefficiencies.

That gets us to Circle.

Circle issues USDC and holds reserves against those coins. It earns interest on the reserves it holds. In the second quarter, reserve income was $667.7 million, or 95.2% of Circle’s total revenue. Average USDC in circulation reached about $76.5 billion, up from $61 billion a year earlier.

The attraction is obvious. If more businesses and consumers use USDC, Circle gets more dollars to hold in reserve and potentially more reserve income.

But there’s a catch.

Circle’s economics depend heavily on interest rates. Lower rates mean lower returns on those reserves. Circle’s own filing estimates that a one-percentage-point decline in rates, if USDC circulation remains constant, would cut annual reserve income by roughly $737 million.

Then there’s Coinbase.

Coinbase is fascinating because it sits on the other side of Circle’s economics. It distributes USDC and gets paid handsomely for doing it.

Circle paid Coinbase $324.6 million in distribution costs in the second quarter alone. Coinbase says its customers held a total of $20 billion in USDC in Coinbase Products, on average, during the quarter – more than 30% of the total supply of USDC.

Coinbase captured roughly half of all USDC economics (meaning the yield earned by the investments USDC holds and who benefits from it) over the past year.

That gives investors two very different stocks tied to the same trend.

Circle makes more money when USDC circulation and reserve income grow… while Coinbase gets a large piece of the economics for putting USDC in front of customers.

Stablecoins also give Coinbase something it badly wants: revenue that doesn’t require customers to trade bitcoin constantly. Subscription and services revenue reached $555 million last quarter, or 48% of net revenue.

The Next Test for Stablecoins Is Real-World Use

There’s plenty of room for stablecoins to disappoint, however.

Most stablecoin activity still has little to do with buying goods or paying workers. The figures I have been watching put actual payments at roughly $390 billion out of about $35 trillion in stablecoin-network activity over a recent 12-month period (annualized for 2025 in December). Call it 1%. Trading, arbitrage, and machines moving liquidity still dominate the industry.

I keep coming back to the other side of that number, though.

The payments portion is tiny, but it more than doubled from 2024 to 2025.

The GENIUS Act will not make stablecoins mainstream by itself. The Treasury cannot force people to use USDC. What stablecoin regulation can do is remove one of the primary reasons banks, payment companies, and large businesses have hesitated to build around it.

That creates competition, too. Circle and Coinbase will not have this market to themselves.

But the investment question has become much more concrete. We no longer have to ask whether blockchain will someday find a use beyond crypto trading.

Money is already moving over these networks, and we’ll soon get to find out who exactly stands to gain when stablecoins become part of the main financial plumbing.

Good investing,

Eric Wade

Editor’s Note: Whitney Tilson … hedge fund legend, Harvard grad, and the investor CNBC called “The Prophet” … just stepped forward not just as a financial expert, but as a father and an American. He says we’re entering the most chaotic six months this country has seen in a generation. The signs are already everywhere. And he believes most people have no idea what’s coming for their money. His warning (and the one move he says can make all the difference) is in his free presentation.