Circle Internet Group confirmed that its long-standing commercial arrangements with Coinbase would continue and that USDC▲$0.9999 would continue to see deep integration throughout the exchange’s ecosystem under the same economic arrangement.
The announcement was made during the company earnings call for the second quarter of fiscal year 2026, during which management stated that it had no intention to pay quarterly dividends because profits would be used for product development, infrastructure and planned development.
The partnership was established in August 2023 following the dissolution of the Centre Consortium and is subject to an automatic rolling continuing period through June 2029 under the companies’ collaboration agreement.
Following this corporate restructuring, Circle became the sole issuer and regulator of USDC, while Coinbase obtained a minority stake in Circle and continued to play a major role in distributing USDC.
Under the current system, Coinbase only receives a portion of the income generated from the reserves backing USDC, with Circle receiving an issuer allocation first and the income split based on where the USDC in circulation is held.
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Coinbase earns a portion of the revenue from the reserve generated by USDC that is circulating outside of both companies’ balance sheets, giving Coinbase further incentive to be a distribution partner and not just an exchange listing for the asset.
At the end of Q2, USDC had a circulating supply of $73.3 billion, up 19% from one year prior. Around 30% of the circulating supply was held on Coinbase’s platform, and another 17% was held on Circle’s infrastructure.
Total revenues and reserve income increased to $701 million, but the yield on reserves was reduced with the increase in circulation.
The renewed agreement does not preclude Circle from seeking to add other distribution channels. Circle has previously stated it was working with more than 150 partners including exchanges, wallets, payment processors and financial platforms. Circle and Coinbase have continued to support third-party adoption of USDC, including most recent launches that have integrated USDC within Hyperliquid ecosystem.
Chief Financial Officer Jeremy Fox-Geen said management would rather maintain a healthy balance sheet than return capital through routine share buybacks and dividends.
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According to the company, retaining the earnings will allow it to better make investments that reflect the market environment and future calculated opportunities available in the payments, regulated infrastructure, and digital asset services. Circle said it may change the dividend strategy in the future but has no plans to do so at this time.
The move follows Circle continuing to expand its regulated businesses in the US. The company said that obtaining final approval to create Circle National Trust would increase the custody infrastructure and future institutional services related to USDC.
Meanwhile, Circle is preparing for new federal stablecoin regulation and working to keep its biggest operating expense, the costs of distributing its coins, under control.
