Coinbase Global (NASDAQ:COIN) has taken a significant step in its international expansion by launching a 24/5 US stock trading service for eligible UK customers. The offering, which went live on Thursday, provides access to nearly 4,000 US-listed equities, allowing users to trade stocks directly from their Coinbase accounts. This move is part of the company's broader strategy to increase engagement and retain more of its USDC stablecoin within its ecosystem.
The launch comes at a critical time for the crypto exchange, which reported a challenging second quarter. Overall revenue declined by 14% quarter-over-quarter to $1.22 billion, while transaction revenue fell by 20.8% to $599 million. In contrast, subscription and services revenue, which includes stablecoin income, proved more resilient, dipping only 5% to $555 million. Stablecoin revenue alone contributed $292 million, representing 53% of subscription income and about 24% of total revenue, underscoring the importance of USDC to Coinbase's financial health.
Despite the strategic importance of stablecoins, average USDC holdings on Coinbase products reached an all-time high during the quarter, and paid subscriptions for Coinbase One also hit record levels. However, stablecoin revenue still slipped 4.3% quarter-over-quarter, highlighting the need for new catalysts to drive growth. The UK stock trading service is designed to address this by giving users more reasons to keep their USDC on the platform between trades.
The UK rollout allows users to buy stocks using either British pounds or USDC. Coinbase One subscribers benefit from unlimited USDC rewards and commission-free stock trades. However, zero commissions do not mean zero costs. Coinbase applies a 0.50% fee for currency conversion from sterling to dollars; for example, a £10,000 transaction would incur a £50 charge. This fee structure could influence user behavior, especially for those who prefer to trade in their local currency.
Regulatory constraints in the UK also shape the offering. Unlike in the US, where payment-for-order-flow is common, UK regulations under the Financial Conduct Authority (FCA) make it unlikely that firms accepting routing payments would comply with best-execution and inducement obligations. As a result, Coinbase has not disclosed a specific revenue target for the stock trading service, leaving investors to monitor key metrics such as FX conversion volumes, USDC balances, subscription uptake, and cross-selling opportunities.
The launch places Coinbase in direct competition with established players like Robinhood Markets (NASDAQ:HOOD) and Trading 212, both of which already offer US stock trading to UK clients. Robinhood provides access to a set of 24-hour stocks with a 0.10% FX fee on weekdays and 0.30% on weekends, while Trading 212 advertises access to over 5,600 US stocks. Coinbase's offering is more limited in scope—about 4,000 stocks—but it differentiates itself by allowing users to fund trades with USDC, a feature unique to its crypto-native platform.
The service uses standard shares, not tokenized stocks, with orders routed through Coinbase Capital Markets to Apex Clearing for execution, settlement, and custody. Fractional trading is not available outside regular US market hours, which may limit appeal for some investors. Keith Grose, Coinbase's UK and Europe head, described the app as a “one-stop shop” for stocks, stablecoins, and savings, hinting at further product launches tailored for the UK and EU markets.
Analyst sentiment on Coinbase remains divided. Raymond James characterized the crypto trading environment as “challenging,” with little clarity on when volumes might rebound. Conversely, Zacks strategist David Bartosiak noted that “the business mix keeps improving,” reflecting optimism about the shift toward higher-margin subscription services. Wall Street analysts have an average price target of $195.87, roughly 34% above Thursday's intraday level, but estimates range widely from $85 to $330, indicating significant uncertainty about Coinbase's diversification strategy.
Risks remain, including the possibility that the stock trading service attracts low-value accounts without meaningfully increasing USDC balances. Overnight trading may suffer from thinner liquidity and wider spreads, and FX charges could deter some users. Additionally, Coinbase remains exposed to volatility in crypto trading volumes and regulatory changes. The company did not provide specific guidance for the launch, leaving investors to assess whether this initiative will bolster retention or merely add a new revenue stream without transformative impact.
