Coinbase Just Joined a 140-Company Stablecoin Alliance. Here's What It Means for the Stock.

On June 30, Coinbase (NASDAQ: COIN) joined a coalition of more than 140 financial, tech, and retail companies to back a new stablecoin called Open USD (OUSD). That move was surprising, since Coinbase was a founding partner for Circle's (NYSE: CRCL) USDC (CRYPTO: USDC) stablecoin, and it still retains all the interest income from USDC on its own exchange.

But with that crucial revenue-sharing partnership with Circle set to expire on Aug. 18, Coinbase appears interested in supporting other stablecoins, such as OUSD, to reduce its exposure to USDC. That shift already crushed Circle's stock, but what does it mean for Coinbase's stock?

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Why is Coinbase joining that big coalition?

Circle is the only company that mints and manages USDC. Circle also generates most of its revenue by earning interest on the cash and U.S. Treasuries it holds to back the stablecoin. Coinbase and a few other companies get a cut of that interest, known as reserve income.

With OUSD, the entire coalition of companies -- including Coinbase, Visa, Mastercard, Stripe, BlackRock, Alphabet's Google, and Shopify -- will jointly manage the cryptocurrency and split its reserve income. That democratization and decentralization represent a major threat to Circle, but it's bullish for Coinbase.

Coinbase can renew its revenue-sharing agreement with Circle and continue to support OUSD's planned launch later this year. As one of the world's largest cryptocurrency exchanges, it will profit from the rising adoption of stablecoins, regardless of which token rises to the top.

In 2025, Coinbase's revenue from stablecoins rose 48% year over year to $1.35 billion, accounting for nearly 19% of its top line. If the CLARITY Act is finally signed into law with a favorable outcome for stablecoin yields, that business could grow even faster and reduce Coinbase's dependence on more volatile cryptocurrencies.

What does this alliance mean for Coinbase's stock?

In the past, Coinbase's revenue was pinned to the crypto market's boom-and-bust cycles. But if stablecoins are more widely adopted as a faster, cheaper, and more privacy-oriented alternative to U.S. dollars, Coinbase's exposure to those choppy market cycles will decrease.

From 2025 to 2028, analysts expect Coinbase's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to both grow at CAGRs of 4%. Those growth rates might seem weak for a stock that trades at 21 times this year's adjusted EBITDA.

However, those forecasts could rise once interest rates decline, more investors rotate back to cryptocurrencies, and a new crypto summer begins. The approval of stablecoins will amplify those gains. If you expect those tailwinds to kick in and help Coinbase crush analysts' estimates, it could still be a great time to accumulate its out-of-favor stock.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, BlackRock, Mastercard, Shopify, and Visa. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.