Stablecoin Regulations Set to Redefine Coinbase's Profitability

The introduction of US stablecoin regulations has sent shockwaves through the cryptocurrency industry, with significant implications for Coinbase's revenue and COIN stock.

According to recent reports, the GENIUS Act rules are expected to increase Coinbase's stablecoin revenue up to sevenfold. This development is likely to have a profound impact on COIN stock and the broader USDC payments market.

The draft of the GENIUS Act provisions would bar stablecoin issuers from providing yields, which could limit Coinbase's ability to pass interest earnings on USDC reserves to its users. However, proponents argue that this move could create a more predictable income stream for Coinbase, reducing its reliance on trading fee income, which is tied to market volatility.

Regulatory pressures have already taken a toll on COIN stock, with the price declining by 6.48% on February 23 and nearly 48% over the last six months. The regulatory outcome will determine the level of competition Coinbase faces against global frameworks such as Europe's MiCA and shape ongoing SEC oversight in the US crypto market structure.