Author: angelilu, Foresight News

Y Combinator (abbreviated YC), the “top startup incubator” that successfully incubated Airbnb, Stripe, Coinbase, announced on February 3rd that starting from Spring 2026, its funded startups can choose to receive a $500,000 investment in the form of USDC stablecoin. This is also YC’s first official announcement of providing investment via stablecoins.

From Spectator to Participant

In 2012, when YC invested in Coinbase, Bitcoin was only valued between $5 and $13. Over the next 14 years, YC invested in nearly 100 crypto companies, but the investments were still made through traditional bank transfers.

The key reason for YC’s change is the passage of the US “GENIUS Act” in July 2025. This legislation established a federal regulatory framework for stablecoins, requiring reserves to be 1:1 backed and granting redemption rights to holders. The arrival of regulatory certainty eliminated the biggest obstacle for top institutions to adopt cryptocurrencies. Just seven months later, YC announced the stablecoin payment option.

The true significance of this move is that YC “uses” stablecoins themselves. When an institution is willing to migrate core business processes to new technology, it is a real vote of confidence. From investors to users, from spectators to participants, YC has completed a thorough role transformation over 14 years.

Why choose stablecoins?

The primary benefit of investing with stablecoins is efficiency. Imagine a startup in India receiving YC’s $500,000 investment: using traditional wire transfer might cost thousands of dollars in fees and take 3 to 7 days; using USDC, the cost is nearly zero, and the funds arrive in seconds.

Additionally, YC’s decision is based on a practical judgment: the new generation of entrepreneurs is already “Crypto Native.” YC stated in its announcement that the actual use of stablecoins is growing among the companies it invests in, especially in markets like India and Latin America.

Startups like Aspora and DolarApp are already using stablecoins to help clients transfer and store funds more efficiently in regions with limited or costly traditional banking infrastructure. To support this trend, YC emphasizes support for stablecoins on Ethereum, Base, and Solana blockchains, enabling entrepreneurs worldwide to choose the most suitable payment pathways.

Why USDC?

Savvy observers have noticed that YC isn’t just broadly promoting stablecoins but specifically endorsing USDC. Although USDC’s market cap is smaller than USDT, it is issued by Circle, a US-based company regulated by the Federal Reserve and state authorities. As a benchmark in Silicon Valley venture capital, YC must ensure every dollar complies with US regulations.

And don’t forget, YC invested in Coinbase in 2012, which is one of the co-founders of USDC. Additionally, Nemil Dalal, YC’s partner responsible for crypto investments, was previously Coinbase’s Product Director. This “affinity” may also contribute to YC’s natural trust and support for the USDC ecosystem.

The “Nokia Moment” for Venture Capital

In fact, in the crypto VC space, using stablecoins isn’t new—Paradigm and a16z Crypto have long used them on a case-by-case basis. But YC’s breakthrough is that it is the “godfather of mainstream venture capital,” with over 90% of its investments in AI, enterprise services, or consumer products, rather than crypto companies.

Previously, VCs used stablecoins mainly because founders couldn’t open USD accounts—an act of desperation. Now, YC has proactively included this option in every founder’s standard contract template. Whether you’re working on large models or biotech, if you want to, you can directly receive USDC. This process-oriented, standardized move signals that the venture capital industry is experiencing its own “Nokia Moment”—traditional transfer methods are being disrupted at a fundamental level.

Will other VCs follow suit?

Currently, top Silicon Valley VCs are divided on crypto. a16z crypto represents the “aggressive camp,” having raised $15 billion in early 2026, focusing on AI and crypto investments; while YC represents the “pragmatic camp,” starting from payments, not aggressive but extremely cautious.

More traditional VCs may still be observing, but history offers clear precedent. Traditional financial institutions typically take 3 to 5 years to go from skepticism to embrace: Goldman Sachs and JPMorgan Chase both experienced a process from dismissing crypto as “fraud” to launching related services.

According to a16z’s report, currently 90% of financial institutions are integrating stablecoins. In 2025, stablecoin trading volume reached $46 trillion, nearly three times that of Visa. Market forecasts predict that by 2026, stablecoin circulation will surpass $1 trillion. Behind these numbers is an irreversible trend. YC’s decision may just be a node in the wave of stablecoins.

What kind of entrepreneurs is YC looking for?

Currently, applications are open for YC’s Spring 2026 incubation program, which will be held in San Francisco from April to June. The application deadline is 12:00 PM Pacific Time on February 10th. Applications submitted before the deadline will receive results by March 13th.

In September 2025, YC launched the “Fintech 3.0” initiative in partnership with Base and Coinbase Ventures, emphasizing support for on-chain startups in areas such as stablecoin applications, tokenization and trading (new credit markets, on-chain capital formation, new trading interfaces), Apps and Agents (including social, financial, collaboration, gaming, etc.).

Fourteen years ago, YC invested in Coinbase, betting on the future; fourteen years later, YC is using USDC to shape the future.

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