Unprecedented! Silicon Valley venture capital legend YC officially "goes all-in" on $USDC. Has the "Nokia moment" for traditional finance arrived?

Fourteen years ago, an incubator called Y Combinator invested in a then-unknown startup called Coinbase. At that time, the price of $BTC hovered between $5 and $13. Fourteen years later, the incubator announced that starting in spring 2026, every startup it invests in can choose to receive $USDC stablecoin as a $50,000 investment.

This isn’t YC’s first foray into the crypto space; it has invested in nearly a hundred related companies. But over the past fourteen years, all investments were transferred through traditional banking channels. The difference this time is that YC has incorporated stablecoin payments into its standard contract template, available for all portfolio companies, whether they are working in artificial intelligence or biotech.

The direct catalyst for YC’s change was the passage of the U.S. GENIUS Act in July 2025. This legislation established a federal regulatory framework for stablecoins, explicitly requiring 1:1 reserves and redemption rights for holders. The arrival of regulatory certainty removed the biggest obstacle for mainstream institutions to adopt stablecoins. Just seven months after the bill’s passage, YC announced this decision.

The deeper significance of this move is that YC has shifted from being an “investor” to a “user.” When an institution is willing to migrate its core business process—fund distribution—to the blockchain, it demonstrates a level of trust that surpasses any financial investment.

The rationale for choosing stablecoins is very pragmatic: efficiency. An Indian startup receiving $500,000 via traditional wire transfer might pay thousands of dollars in fees and wait a week; using $USDC, the cost is nearly zero, and settlement takes only one second. YC stated that stablecoin usage in its portfolio is rapidly growing in regions with weak banking infrastructure, such as India and Latin America.

Notably, YC is not just casually mentioning “stablecoins,” but explicitly naming $USDC. Although $USDT has a higher market cap, $USDC is issued by Circle, based in the U.S., and regulated by the Federal Reserve and state authorities. For a Silicon Valley benchmark like YC, compliance is a top priority. Additionally, YC invested in Coinbase in 2012, which is a co-initiator of $USDC. Nemil Dalal, YC’s partner responsible for crypto investments, was previously Coinbase’s Director of Product. This deep ecosystem connection forms another foundation for their choice.

In the crypto venture capital world, investing with stablecoins is not new; firms like Paradigm and a16z Crypto have already practiced it. But YC’s breakthrough is that it is the “godfather of mainstream VCs,” with over 90% of its portfolio companies not being crypto-native. Previously, VCs used stablecoins mainly as a workaround 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—the old financial pipelines are being disrupted by more efficient protocols.

Silicon Valley VCs are divided on this. a16z Crypto is seen as the “radical wing,” having raised $15 billion in early 2026, heavily betting on the intersection of AI and crypto. YC represents the “pragmatists,” taking steady but solid steps through payments. More traditional VCs may still be observing, but the clear trajectory is: from skepticism to embracing new technology, typically over three to five years.

Market reports show that over 90% of financial institutions are currently integrating stablecoins. By 2025, the total on-chain settlement volume of stablecoins reached $46 trillion, nearly three times Visa’s global transaction volume. The market widely predicts that by 2026, the total circulating supply of stablecoins will surpass $1 trillion. These figures outline an irreversible trend.

Currently, YC has opened applications for its spring 2026 incubation program and explicitly states that its “Fintech 3.0” plan, in partnership with Base and Coinbase Ventures, will focus on funding startups in stablecoin applications, asset tokenization, and new on-chain credit markets.

Fourteen years ago, YC invested in Coinbase, betting on a vague future; fourteen years later, it is using $USDC to actively participate in building that future into reality. From spectator to participant, this role shift took fourteen years, but once the wave forms, its spread will be far beyond imagination.

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