Key insights:
- Coinbase tested USDF internally under its Custom Stablecoins backend framework.
- Flipcash developed USDF, with a public launch expected in early 2026.
- Stablecoins generated nearly $247 million for Coinbase in the fourth quarter.
Coinbase began internal testing of Flipcash’s USDF stablecoin as part of its backend infrastructure, according to company disclosures. The test marked the first visible rollout under Coinbase Custom Stablecoins, a feature aimed at enterprise token issuance.
Coinbase confirmed that the test remained operational only, with trading functions disabled. The move underscored how central stablecoins remained to Coinbase’s revenue strategy.
The development mattered because Coinbase Custom Stablecoins expanded the exchange’s role beyond distribution into token infrastructure. The program allowed businesses to issue branded, dollar-backed tokens collateralized by Circle’s USD Coin.
Coinbase said the system enabled reward generation tied to on-chain activity and frictionless transfers across supported blockchains. For enterprises, the feature targets payments, treasury operations, and cross-border settlements.
Coinbase Custom Stablecoins Enter Backend Testing Phase
Coinbase disclosed the test in a post on X on Tuesday, stating that USDF had been enabled for operational testing. The exchange emphasized that the rollout did not include trading, deposits, or withdrawals.
The crypto exchange described the phase as backend-only, signaling infrastructure validation rather than product launch. No timeline for public access was provided.
The USDF stablecoin sat within the Coinbase Custom Stablecoins framework introduced in December. The program allowed companies to mint proprietary stablecoins backed by Circle’s USDC reserves.
The firm positioned the product as a way for businesses to move capital across supported chains without banking delays. Rewards tied to token usage formed a core incentive for issuers.
Coinbase did not disclose testing volumes or settlement activity linked to USDF. The company limited its statements to operational readiness and future updates.
That restraint suggested that the crypto exchange treated the program as a long-term infrastructure bet rather than a near-term trading catalyst.
Flipcash Builds USDF for App-Native Payments
Crypto infrastructure firm Flipcash developed the USDF stablecoin, according to people familiar with the project. Sources said USDF would become the primary stablecoin within the Flipcash app once launched.
Flipcash targeted early 2026 for the public rollout. The firm had not released reserve or issuance mechanics beyond USDC collateralization.
USDF followed a growing pattern of application-native stablecoins built for closed-loop ecosystems. Rather than competing directly with USDC or Tether’s USDT, the token focused on internal settlement and user incentives.
Coinbase’s backend support gave Flipcash access to exchange-grade infrastructure without listing risk. That structure reduced compliance friction during early deployment.
Flipcash had not published user metrics or projected transaction volumes. However, Coinbase’s willingness to test USDF internally signaled confidence in the underlying design.
The exchange historically limited such testing to partners aligned with its compliance standards.
Enterprise Stablecoins Expand Beyond Flipcash
Flipcash was not the only firm using Coinbase Custom Stablecoins. Solana-based self-custody wallet Solflare and decentralized finance platform R2 also collaborated with Coinbase on branded stablecoin solutions.
Coinbase confirmed those partnerships but did not disclose development timelines. The projects reflected a broader push toward application-specific digital dollars.
Custom stablecoins targeted business functions where banking rails remained slow or expensive. Coinbase highlighted payroll, business-to-business payments, cross-border transfers, and internal liquidity management as key use cases.
The pitch focused on operational efficiency rather than speculative trading. That framing aligned with increasing regulatory scrutiny around consumer-facing stablecoins.
The approach also allowed the crypto exchange to scale stablecoin activity without fragmenting liquidity. By anchoring all custom tokens to USDC reserves, the exchange preserved its economic exposure to Circle.
That structure reinforced Coinbase’s existing stablecoin revenue stream.
Stablecoins Anchor Coinbase Revenue Growth
Stablecoins generated nearly $247 million in revenue for Coinbase during the fourth quarter, the company reported. The income came primarily from interest and fee-sharing tied to USDC usage.
Coinbase maintained a close partnership with Circle, the issuer of USDC. That relationship remained central to Coinbase’s business model.
The firm also lobbied U.S. senators to protect stablecoin reward programs during market structure negotiations. Executives argued that limiting rewards would reduce adoption and innovation.
The effort coincided with broader legislative momentum around payment stablecoins. Regulation increasingly shaped how exchanges positioned stablecoin products.
Market data supported Coinbase’s focus. The stablecoin sector reached $312.6 billion in total supply, according to industry estimates.
The U.S. Treasury projected growth to $2 trillion by 2028, driven by payments and settlement use cases.
Stablecoin Payments Accelerate After Regulatory Clarity
Bloomberg data compiled by Artemis Analytics showed stablecoin transaction volumes hit $33 trillion in 2025. That figure marked a 72 percent increase from the previous year.
USDC led transaction volume with $18.3 trillion processed. Tether’s USDT followed with $13.3 trillion, despite maintaining the largest market capitalization.
Analysts linked the surge to regulatory clarity following the passage of the GENIUS Act in July 2025. The legislation established the first comprehensive U.S. framework for payment stablecoins.
Industry participants said legal certainty encouraged institutional adoption. Fintech platforms accelerated integration soon after.
Bloomberg projected stablecoin payment flows would grow at an 81 percent compound annual rate through 2030. The forecast estimated $56.6 trillion in annual volume by the end of the decade.
Those projections framed Coinbase Custom Stablecoins as a strategic infrastructure layer rather than an experimental product.
What Comes Next for Coinbase Custom Stablecoins?
Coinbase had not announced a public launch date for USDF or other custom stablecoins. The exchange framed the current activity as infrastructure validation.
Future milestones likely included compliance approvals, issuer onboarding, and ecosystem integrations. Each step carried regulatory and operational implications.
For Coinbase, the immediate objective appeared defensive as much as expansionary. Custom stablecoins deepened enterprise reliance on Coinbase’s backend while preserving USDC dominance.
The strategy tied stablecoin growth directly to Coinbase’s balance sheet performance. Execution, not experimentation, remained the key variable.