Coinbase signals plans beyond USDC with USDF stablecoin backend testing

Coinbase has enabled a new Coinbase Custom Stablecoin, USDF, for backend operational testing on its exchange. The company said on Tuesday through its Coinbase Markets, the testing phase does not support trading, deposits, or withdrawals.

The backend test features an early stage of development, with Coinbase saying more updates will be released as testing advances. The action suggests that the corporation may expand its stablecoin approach beyond USDC, which it co-issues with Circle.

Coinbase expands custom stablecoins amid market growth

Coinbase introduced the “Coinbase Custom Stablecoins” feature in December of last year. It announced that this program would enable companies to transfer money between Coinbase-supported blockchains with ease and earn rewards linked to token activity.

The exchange revealed custom stablecoin infrastructure as part of a larger effort to broaden its product line. The framework is currently being used to support the development of USDF during its backend testing phase and to permit the issuance of dollar-backed tokens that are fully collateralized by USDC.

The cryptocurrency infrastructure platform Flipcash is developing the stablecoin, USDF, for testing, which should be accessible in early 2026. USDF will be the main stablecoin on the Flipcash app at launch.

Notably, Flipcash is not the only platform working with Coinbase on custom stablecoins. A self-custody wallet based on Solana, using the same framework as Solflare, and the decentralized finance platform R2 are working with the exchange to create branded stablecoin products.

Stablecoins, however, remain a key component of Coinbase’s business strategy. The exchange continues to maintain a tight partnership with Circle, the issuer of USDC, one of the most popular dollar-pegged tokens in the cryptocurrency market. Coinbase receives a portion of interest revenue and fees related to USDC usage as a result of that partnership.

In the fourth quarter of last year, Coinbase revealed it generated around $332.5 million in stablecoin revenue, a 38% surge. This was driven by USDC interest and retail volume of $41 billion. 

Currently, on-chain data from Coingecko shows that the stablecoin market is at $312.6 billion, with $106,893,512,390 in 24-hour trading volume.

Stablecoin growth faces regulatory challenges amid market surge

The U.S. Department of the Treasury’s Q1 2025 report revealed that U.S. dollar-pegged stablecoins are expected to attain an aggregate market valuation of over $2 trillion by 2028.

Earlier this month, Bloomberg Intelligence research predicted that stablecoin payment flows could reach $56 trillion by 2030, at a compound annual growth rate of 81%. Despite these projections, global regulators remain cautious about the pace and structure of that growth.

In December of last year, the International Monetary Fund (IMF) cautioned that stablecoins could upend established growth and financial systems. The IMF warned that disparate national regulatory frameworks are increasingly creating structural “roadblocks” that threaten financial stability, erode oversight, and impede the development of international payments.

According to the IMF, stablecoins can cross borders more quickly than monitoring can keep pace because of this legal patchwork. This limits the authorities’ ability to monitor reserves, redemptions, and liquidity management. It also hampers oversight of anti-money laundering measures when issuers operate from less-regulated jurisdictions while providing services to users in more strict markets.

The fund further cautioned that this undermines international oversight and leads to regulatory arbitrage.

Even as regulators raise concerns, stablecoin usage continues to accelerate. Data gathered by Artemis Analytics revealed that the value of global stablecoin transactions surpassed $33 trillion in 2025, a 72% rise from the year before.  

USDC emerged as the most popular stablecoin by transaction volume, handling $18.3 trillion, while Tether’s USDT handled $13.3 trillion despite continuing to dominate by market capitalization at $187 billion. This surge in on-chain activity has coincided with the passage of the GENIUS Act, the first complete U.S. regulatory framework for payment stablecoins, which was passed in July 2025.

Industry leaders argue that clearer rules could accelerate mainstream adoption. Tether creator Reeve Collins said the enactment of regulations such as GENIUS opens the door for stablecoins to be accepted globally. 

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