Coinbase has announced that it will store a larger portion of its USDC holdings on the Base network starting on March 26.

Max Branzburg, Vice President of Product, shared this update on X, stating: "Moving forward, Coinbase will increase storage of corporate and customer USDC balances on Base."

Branzburg explained that this shift will enable Coinbase to better manage and secure customer funds with reduced fees and quicker settlement times, ensuring there will be no impact on user experience.

Encouraging other companies to follow suit, Branzburg emphasizes Coinbase's commitment to conducting more of its business activities on-chain.

Breakdown of Coinbase's USDC Holdings

According to data from Arkham Intelligence, Coinbase currently possesses a total of $220.7 million in USDC, with just 17% stored on the Base network - equivalent to $37.4 million.

The majority of their USDC funds, totaling 155.1 million USDC, approximately 70% of the total, is currently held on the Ethereum network.

The remaining 13% of USDC holdings are distributed across various other chains, including $17.2 million on Arbitrum (7.8% of the total), $4.9 million on Avalanche (2.2%), $5.1 million on Optimism (2.3%), $1.0 million on Polygon (0.5%), and $38,557 on BNB Chain (0.02%).

Potential Impact of Balance Shift

As of March 26, there was $735.2 million in USDC natively on Base, along with $73.5 million of USDC bridged from Ethereum to Base.

By transferring hundreds of millions of dollars in USDC to the network, Coinbase's move could significantly alter the chain's overall USDC balance.

However, it's important to note that Coinbase's USDC holdings represent only a fraction of USDC's total market cap of $32.3 billion, with a vast majority existing on Ethereum. Therefore, shifts related to Coinbase's USDC balance won't have a substantial impact on USDC's broader distribution within Ethereum.

Previously playing a significant role in governing USDC through the CENTRE consortium, Coinbase transferred governance to Circle following CENTRE's dissolution in August 2023. Currently, Coinbase holds a stake in Circle, maintaining a close commercial relationship between the two companies.