Bitcoin News Today: Coinbase imposes 0.1% fee on large USDC conversions to address revenue shortfall

Coinbase has announced a 0.1% fee on USDC-to-USD conversions exceeding $5 million over any 30-day period, marking the first time the platform has imposed a charge on stablecoin off-ramping. The policy, effective from August 13, 2025, is a response to declining trading volumes and revenue, following the exchange’s weak Q2 earnings report. The move aims to curb high-volume exits, preserve USDC liquidity, and mitigate distortions created by Tether’s redemption fees [1].

The fee applies to net conversion volume, calculated as the difference between USDC purchases and sales within the rolling 30-day window. By targeting large-scale users, Coinbase hopes to discourage one-way conversions from USDC to fiat, which it likens to ETF redemption flows that often incur fees to cover operational costs [1]. This strategy aligns with broader efforts to stabilize USDC’s market position and reduce the outflow of liquidity from its platform [1].

The decision has sparked frustration among users, many of whom see it as a shift toward traditional financial practices. Critics on social media have drawn comparisons to bank fees, questioning whether Coinbase is adopting a model more aligned with legacy institutions than the decentralized ethos of the crypto space [1]. Meanwhile, Coinbase leadership has defended the policy as a necessary step to address competitive disadvantages. Tether’s fees had previously made USDC the preferred route for large fiat exits, a dynamic that now threatens Circle’s market share and USDC supply [1].

The new policy also reflects ongoing market pressures in the stablecoin sector. USDT continues to trade at a premium due to strong demand for perpetual futures collateral, pushing users to burn USDC during conversions. This has led to increased use of Coinbase as a conduit for bypassing Tether’s redemption costs. With the new fee in place, Coinbase is directing such users toward Circle’s over-the-counter (OTC) minting services instead of public exchanges [1].

Coinbase’s financial struggles were highlighted in its second-quarter earnings report, where transaction revenue dropped by 39% due to weak retail trading activity. Total revenue for the quarter reached $1.5 billion, falling short of analyst expectations. XRP contributed 13% of transaction revenue, surpassing Ethereum’s 12% for the second consecutive quarter. In a move to bolster its balance sheet, Coinbase added 2,509 Bitcoin—worth $222 million—to its holdings, bringing its total BTC holdings to 11,776 BTC [1].

Despite these efforts, the company’s stock price fell sharply by 15% following the earnings report. Institutional investors have also taken notice. Ark Invest, for example, sold $6.5 million in Coinbase shares in July, continuing a trend of reducing exposure to underperforming crypto-related assets [1]. In response, Coinbase announced a $2 billion convertible bond offering, including senior notes maturing in 2029 and 2032, to help stabilize its financial position.

The introduction of the 0.1% fee underscores Coinbase’s evolving strategy amid a challenging market environment. As it navigates declining retail demand and intensifying competition among stablecoins, the exchange is taking steps to protect liquidity, manage operational costs, and maintain its position in a rapidly shifting crypto landscape [1].

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Source: [1] [Coinbase to Charge 0.1% Fee on Large USDC Conversions Amid Revenue Shortfall](https://cryptonewsland.com/coinbase-to-charge-0-1-fee-on-large-usdc-conversions-amid-revenue-shortfall/)