Crypto exchange Coinbase Global (COIN) may be able to generate $1.2 billion of additional interest income-driven revenue in 2023. This will reportedly be due to increases in short-term interest rates, JPMorgan analyst Ken Worthington told clients in a note earlier this week.
Coinbase 2023 revenue
It’s been just revealed that the Coinbase’s joint venture with USDC issuer Circle alone could contribute about $700 million of incremental revenue, JPMorgan estimates.
The two firms formed a joint venture in 2018 called the CENTRE Consortium, which included a revenue share on interest income from USDC reserves.
Accprding to the same reports, there are more ways Coinbase could earn interest income. These are from customer fiat and its corporate cash balance, JPMorgan noted, adding up to a potential total of $1.2 billion in added revenue next year.
The bank said that a key risk for Coinbase realizing its interest income is the possibility of a reduced holding of USDC and fiat currency with the exchange.
“We see the potential for institutional investors to hold less USDC given the opportunity cost of holding quasi-cash that doesn’t offer a yield. We also see retail holding less of its fiat at Coinbase since it doesn’t get a yield. As such, we see the potential for USDC balances and fiat balances to decline for Coinbase,” JPMorgan wrote.
Coinbase boosts crypto adoption
The important digital asset exchange Coinbase is taking an aggressive approach to inform its users how American politicians stand on crypto-related issues.
In a new announcement, Coinbase co-founder and CEO Brian Armstrong addressed how the exchange is pushing its crypto education initiative. This is happening in order to support political candidates with positive sentiment towards crypto.
They just revealed the following, according to official notes:
“Coinbase will begin integrating our crypto policy efforts right into our app. These will help our 103,000,000 verified users get educated on the crypto positions held by political leaders where they live
