Circle Ties Up Loose Ends with Renewed Coinbase Deal

Circle has renewed its agreement with Coinbase, preserving the existing economics of USDC for another three years. The deal also introduces two new notice-and-cure remedies that can be used if Coinbase misses certain support thresholds.

The contract treats Party Product Economics and Ecosystem Economics as distinct streams, each with its own threshold and timing. If Coinbase fails to meet a particular threshold, Circle can issue an exclusion notice after a 60- or 90-day cure window, depending on the type of failure.

However, even if Circle issues an exclusion notice, it doesn't immediately cut off Coinbase's payout. Instead, the affected stream can continue for up to 12 months before being fully excluded. Additionally, Coinbase has a five-year cumulative period to re-satisfy the relevant threshold and send a valid re-entry notice.

The agreement shows that Circle gains more leverage over Coinbase's payouts, but it still requires a formal process to enforce any exclusions. The deal also highlights the scale of Coinbase's role in distributing USDC, with average holdings reaching $20 billion during the second quarter.