Fourteen years ago, an incubator named Y Combinator invested funds into a then-obscure startup called Coinbase. At that time, the price of $BTC fluctuated between $5 and $13. Fourteen years later, this incubator announced that starting in the spring of 2026, every startup it invests in can choose to receive an investment of $500,000 in the form of $USDC stablecoin.
This is not YC's first encounter with the crypto field; it has invested in nearly a hundred related companies. However, for the past fourteen years, all investment funds have been transferred through traditional banking channels. The difference this time is that YC has included stablecoin payments in its standard contract template for all invested companies to choose from, regardless of whether they are engaged in artificial intelligence or biotechnology.
The direct catalyst that prompted YC to make this change was the passage of the U.S. (GENIUS Act) in July 2025. This act established a federal regulatory framework for stablecoins, explicitly requiring 1:1 reserve backing and the redemption rights of holders. The arrival of compliance certainty removed the biggest obstacle for mainstream institutions to adopt it. Just seven months after the bill was passed, YC announced this decision.
The deeper significance of this move is that YC has transformed from an 'investor' to a 'user'. When an institution is willing to migrate its core business process—namely, fund distribution—to the blockchain, it reflects a level of trust that surpasses any financial investment.
The logic of choosing stablecoins is very pragmatic: efficiency. An Indian startup receiving $500,000 via traditional wire transfer may incur thousands of dollars in fees and wait a week; whereas using $USDC, the cost approaches zero, and settlement takes only a second. YC pointed out in its statement that the application of stablecoins in regions with weak banking infrastructure, such as India and Latin America, is rapidly growing.
It is worth noting that YC is not speaking generally about 'stablecoins' but specifically naming $USDC. Although $USDT has a higher market cap, $USDC is issued by Circle, which is headquartered in the U.S., and is subject to oversight by the Federal Reserve and various state regulators. For a Silicon Valley benchmark like YC, compliance is a primary consideration. Furthermore, YC invested in Coinbase in 2012, and Coinbase is a co-founder of $USDC. The partner responsible for YC's crypto business, Nemil Dalal, was previously Coinbase's Product Director. This deep ecological connection constitutes another layer of foundation for the choice.
In the crypto venture capital circle, using stablecoins for investment is not new; institutions like Paradigm and a16z Crypto have long practiced it. However, YC's breakthrough lies in the fact that it is the 'godfather of mainstream venture capital', with over 90% of its portfolio companies not being crypto-native. In the past, venture capitalists used stablecoins mainly out of necessity when founders couldn’t open bank accounts; now, YC has turned it into a proactive, standardized option. This marks a 'Nokia moment' for the venture capital industry—old financial pipelines are being disrupted by more efficient protocols.
The attitudes of Silicon Valley venture capitalists are diverging on this issue. a16z crypto can be seen as the 'radicals', having raised $15 billion in early 2026, focusing on the intersection of AI and crypto. YC, on the other hand, represents the 'pragmatists', entering through payments with a steady yet solid pace. More traditional venture capitalists may still be watching, but the historical trajectory is clear: traditional financial institutions typically take three to five years to transition from skepticism to embracing new technologies.
Market reports indicate that currently more than 90% of financial institutions are integrating stablecoins. By 2025, the total on-chain settlement volume of stablecoins reached $46 trillion, nearly three times the global transaction volume of Visa. The market generally predicts that by 2026, the total circulation of stablecoins will exceed $1 trillion. These figures outline an irreversible trend.
Currently, YC has opened applications for the Spring 2026 incubation program and has clearly stated that its partnership with Base and Coinbase Ventures for the 'Fintech 3.0' plan will focus on funding entrepreneurs in areas such as stablecoin applications, asset tokenization, and new on-chain credit markets.
Fourteen years ago, YC invested in Coinbase, betting on an uncertain future; fourteen years later, using $USDC, it is actively participating in building a future that has become reality. The transition from observer to participant took fourteen years, but once a wave is formed, its diffusion speed will far exceed expectations.
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