Circle faces fresh market jolt as Coinbase weighs rival Stablecoin play

Coinbase and Circle shares have come under pressure after a CoinDesk report said Coinbase is weighing a role in a new stablecoin platform backed by Stripe, Visa, and Mastercard.

CoinDesk reported that Coinbase Global is evaluating whether to participate in the planned platform, a move that has drawn attention because of the exchange’s existing revenue-sharing deal with Circle Internet Group. The report placed new focus on Coinbase’s stablecoin strategy as investors watched Circle’s USDC business and Coinbase’s negotiating position ahead of a contract renewal later this year.

Coinbase review hits Circle shares

Circle shares fell as much as 4% shortly after Tuesday’s market open, while Coinbase dropped 1.4% during the same morning session. The decline came as crypto-linked stocks traded under pressure and Bitcoin struggled to stay above $67,000.

According to the market data cited in the report, Bitcoin price traded near $66,800 at the time of writing after falling 2.8% over 24 hours. The price drop followed an intraday move toward $65,000 and a $1.8 billion liquidation wave across crypto markets.

On Stocktwits, retail sentiment for both Circle and Coinbase moved into bearish territory over the past day. The platform also showed that message volume around Circle rose 40% in 24 hours, while both Circle and Coinbase recorded more than 150% growth in message volume over the past month.

Stablecoin competition draws attention

Circle’s business remains closely tied to USDC, and its filings show how important reserve income has become to the company. Circle generated $2.64 billion in 2025 revenue from income earned on assets backing USDC, according to the figures cited in the report.

A Stripe, Visa, and Mastercard-backed platform could add fresh competition in stablecoin payments. CoinDesk said such infrastructure may operate outside USDC or move some payment activity away from Circle’s stablecoin network.

Visa and Mastercard shares also weakened in Tuesday morning trading, with both stocks falling more than 2%. Stocktwits data showed a split in retail sentiment, as Visa trended bearish while Mastercard improved to extremely bullish from bullish.

Revenue deal faces August test

The main investor concern centers on Coinbase’s current arrangement with Circle. Under the 2023 agreement, Coinbase keeps all interest income from USDC held on its exchange and shares revenue equally with Circle on USDC circulating elsewhere.

Coinbase CEO Brian Armstrong addressed the agreement during the company’s first-quarter earnings call last month. He said the contracts with Circle were already in place and added that Coinbase expected to continue the relationship under the same terms.

Even so, the CoinDesk report raised questions about whether Coinbase could gain more bargaining power if it joins another stablecoin platform before the August renewal period.