Coinbase will introduce a 0.1% fee on net USDC-to-USD conversions exceeding $5 million within rolling 30-day periods starting August 13, ending its free stablecoin off-ramping service. The move follows a 15% stock decline after Q2 revenue missed expectations at $1.5 billion, with retail trading volumes plummeting 39% to $764 million. CEO Brian Armstrong cited competitive imbalances with Tether (USDT), which charges redemption fees that made USDC conversions the cheapest path for large-scale fiat withdrawals.
User backlash erupted on social media, with Bankless host Ryan Sean Adams comparing the fee to traditional banking, stating: "Hmmm…why I don’t love the precedent here. Feels like bank fees again." Industry analysts like Cobie explained Tether's premium and exit fees created arbitrage opportunities where users swapped USDT to USDC before off-ramping, suppressing USDC's circulating supply. Coinbase framed the fee as an "experiment" to offset operational costs, comparing it to ETF redemption mechanisms.
The decision coincides with Coinbase's $2 billion convertible bond offering to bolster finances after underperforming Q2 results. Despite accumulating 11,776 Bitcoin ($222 million purchased in Q2), revenue declines prompted Ark Invest to sell $6.5 million in COIN shares. The fee aims to discourage one-way USDC outflows while supporting Coinbase's "everything exchange" expansion into tokenized stocks and derivatives.