- Hyperliquid is winding down its own stablecoin, USDH, and migrating to USDC after striking a deal with Coinbase and Circle.
- Coinbase will purchase the brand assets of USDH, with users allowed to make feeless conversions to USDC.
Coinbase has expanded USDC presence on Hyperliquid by becoming the official treasury deployer of the stablecoin on the decentralized exchange. As a result, Hyperliquid is winding down USDH, its native stablecoin.
Announcing the new partnership, Hyperliquid revealed that USDC would become an Aligned Quote Asset (AQA). AQAs are cryptos that are aligned with Hyperliquid’s community and share their revenue with the network itself. This is different from most platforms, where the stablecoin issuer gets to keep all the profits generated. USDH was the first AQA at Hyperliquid, with USDC being described as the second version of the protocol, or AQAv2.
Coinbase has announced its plan to activate AQAv2 on USDC as the treasury deployer, with Circle serving as the technical deployer responsible for CCTP and native cross-chain infrastructure. Both Coinbase and Circle have committed to stake HYPE to activate AQAv2. As part of this…
— Hyperliquid (@HyperliquidX) May 14, 2026
USDH launched in September last year as the first stablecoin under Hyperliquid’s HyperEVM stack. It was issued by Native Markets, which won a competitive bidding process against Paxos, Agora and a few other firms.
Despite USDH being the native stablecoin, USDC has dominated trading on Hyperliquid since the platform launched in 2023, recently topping $5 billion. However, USDH still commands a sizable market share, leading to liquidity fragmentation, which derailed smooth trading.
This ends now, says founder Jeff Yan, noting that “the community no longer has to choose between liquidity and alignment.”
He added that the partnership between his platform, Coinbase, and Circle proves that “titans of the industry [can] come together to build for users and bring all of finance onchain.”
Hyperliquid’s Genius Move with USDH
As part of the transition, Native Markets has granted Coinbase the right to purchase the USDH brand assets. USDH will remain available to all traders for now, but it will gradually be wound down, with traders allowed to make feeless conversions to USDC or to cash out as fiat.
Hyperliquid is winding down USDH less than a year after it launched to great hype. While this may appear as a failed project, USDH has achieved exactly what it was meant to: establishing a model where the stablecoin issuer shares the profits generated with Hyperliquid.
Under the AQA model, Hyperliquid established that any stablecoin issuer that wants to tap into its rapidly growing user base must give up a share of the profits. Coinbase and Circle ended up conceding to this model, even when it goes against their own. Circle has depended on a model where it keeps all its USDC income (revenue hit $694 million in Q1), but now has to switch to the AQA model that USDH made popular on Hyperliquid.
Hyperliquid acknowledges this, noting that “the learnings and mechanics pioneered by USDH will live on in AQAv2.”
On its part, Circle said it’s proud to take a more active role on Hyperliquid. The listed company will stake 500,000 HYPE tokens as part of the partnership, worth $22.75 million at current HYPE prices.
Circle added:
“Hyperliquid’s growth reflects a broader shift toward more sophisticated, onchain financial markets. USDC and Circle’s native cross-chain infrastructure play an important role in this evolution.”
