Coinbase CEO Confident Stablecoin Payments Will Fuel Growth

Coinbase’s CEO is reportedly touting stablecoin payments as a key revenue driver for the cryptocurrency exchange.

The company is working with banks, FinTechs and other businesses to move more payment activity into stablecoins, Brian Armstrong said in a Bloomberg Television interview in Singapore Thursday (Sept. 10), projecting that the $300 billion market for the coins will increase 10-fold by the end of the decade.

“That’s going to be a very big growth industry,” Armstrong said. “Payment volume can be a very interesting business for us.”

As Bloomberg notes, Coinbase has in recent years been trying to diversify beyond relying on crypto trading volumes for revenue. Instead, the company has focused on an “Everything Exchange” model where users can trade a range of blockchain-based products. 

“By stocking what Armstrong described as more financial products on the platform’s ‘shelves,’ Coinbase can participate in whichever asset or activity happens to be attracting customers at a particular moment,” PYMNTS wrote in July on this initiative. 

“Armstrong said the company is seeing adoption across prediction markets, perpetual futures and stock trading, with additional products such as stock options on its roadmap.”

Coinbase’s partnership with Circle, issuer of the world’s second-largest stablecoin USDC, makes up a major piece of the company’s half of revenues, which is part of its subscription and services business, the Bloomberg report added.

“We’re very bullish on stablecoin payments,” Armstrong said when asked about USDC’s role in Coinbase’s future success, adding that the company captures “a little over half of the economics from USDC.”

Stablecoins made up around 24% of Coinbase’s second-quarter revenue, up from 22% in the prior quarter, even as average USDC assets and short-term interest rates were more or less flat, Bloomberg said, citing one of its in-house intelligence reports.

“Rising stablecoin contributions could make Coinbase’s top-line growth more durable and drive higher flow-through if the platform mix continues to improve,” analysts Michael Kim and Paul Gulberg said in the report.

The interview also touched on the Clarity Act, the crypto market structure bill facing a crucial vote in the Senate next week.

According to the report, Armstrong suggested that even if the bill fails in the Senate, he is confident the Securities and Exchange Commission and the Commodity Futures Trading Commission can provide the rules the industry needs.

“We’ll either get it from the Senate or from the regulators, I think, in the next week or two,” he said.