# Coinbase Backs OUSD as Circle Ties $655M in Distribution Costs to Coinbase

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/34219
Published: 2026-10-18T01:16:06.000Z
Updated: 2026-10-18T01:16:06.000Z
Section: Business

> Coinbase’s products held an average of $20 billion in USD Coin (USDC) during Q2, while $655.3 million of Circle’s first-half distribution costs were tied to agreements with the exchange.

Coinbase is Circle’s largest USD Coin partner and a founding partner of Open USD (OUSD), placing the exchange in two stablecoin arrangements with different approaches to partner compensation. Coinbase’s products held an average of $20 billion in USDC during the second quarter of 2026, more than 30% of USDC in circulation at quarter-end.

For the six months ended June 30, Circle recorded $1.395 billion in revenue and reserve income. The total included $1.320 billion in reserve income and $75.207 million in other revenue. Distribution and transaction costs were $815.816 million, with another $3.435 million in other costs. Net income from continuing operations was $103.46 million. These figures cover the first half of the year, not the second quarter alone.

The $815.816 million figure combines distribution and transaction costs; it is not a standalone total for partner payouts. Of Circle’s distribution costs, $655.3 million were tied to Coinbase agreements. Payments under those agreements are based partly on USDC held on Coinbase’s platform and partly on broader ecosystem activity.

Circle Chief Commercial Officer Kash Razzaghi defended the economics in an Oct. 16 post, writing, “The costs of redemption, compliance, and resilience don’t disappear.” About $473 million went to licenses, banking relationships, liquidity, compliance, product investment and blockchain integrations.

Reserve income made up most of Circle’s first-half revenue and reserve income. A 31.7% rise in average daily USDC in circulation contributed about $348 million to reserve-income growth, while a 66-basis-point decline in average yields offset about $220 million.

USDC redemptions through standard banking rails are free and typically settle within two business days. Qualifying customers using Circle Payments Network and Circle Platform can access free near-real-time redemptions.

Open Standard launched OUSD on Sept. 30 with fee-free minting and burning at a 1:1 rate. OUSD’s partner model shares reserve earnings after a management fee. Coinbase’s OUSD integration path became available Oct. 1.