From investing in Coinbase to USDC, Y Combinator (YC) has waited 14 years for a "compliance victory."

Written by: angelilu, Foresight News

Y Combinator (YC), a top-tier startup incubator that has successfully incubated Airbnb, Stripe, and Coinbase, announced on February 3 that starting in the spring of 2026, its funded startups will have the option to receive $500,000 in investment in USDC stablecoin. This marks the first time YC has officially announced offering stablecoin investment as a viable investment option.

From Bystander to Participant

In 2012, when YC invested in Coinbase, the price of Bitcoin was only between $5 and $13. Over the next 14 years, although YC invested in nearly 100 crypto companies, the investment funds were still transferred through traditional banks.

A key reason for YC's change was the passage of the U.S. GENIUS Act in July 2025. This act established a federal regulatory framework for stablecoins, requiring 1:1 reserve backing and granting holders redemption rights. This regulatory certainty removed the biggest obstacle to top institutions adopting cryptocurrencies. Just seven months later, YC announced stablecoin payment options.

The real significance of this move lies in YC's adoption of stablecoins "its own." When an institution is willing to migrate its core business processes to new technologies, that is a true vote of trust. From investor to user, from bystander to participant, YC has completed a complete role transformation in 14 years.

Why choose stablecoins?

The primary advantage of investing with stablecoins lies in efficiency. Imagine an Indian startup wanting to receive a $500,000 investment from YC. Using traditional wire transfers, it might require paying thousands of dollars in fees and waiting 3 to 7 days; with USDC, the cost is almost zero, and the funds arrive in one second.

Furthermore, YC's decision is also based on a realistic assessment: the new generation of entrepreneurs is already "Crypto Native." YC stated that among its portfolio companies, the practical application of stablecoins is steadily increasing, especially in markets such as India and Latin America.

Startups including Aspora and DolarApp are already using stablecoins to help customers transfer and store funds more efficiently in regions with limited or costly traditional banking infrastructure. To support this trend, Y Combinator specifically emphasizes its support for stablecoins on the Ethereum, Base, and Solana blockchains, allowing global entrepreneurs to choose the payment path that best suits their needs.

Why choose USDC?

Astute observers have noticed that YC isn't simply saying it uses stablecoins in general, but specifically mentioning USDC. While USDC's market capitalization is smaller than USDT's, it's issued by Circle, a US-based company, and regulated by the Federal Reserve and various states. As a benchmark for Silicon Valley venture capital, YC must ensure that every penny complies with US compliance requirements.

Furthermore, let's not forget that YC invested in Coinbase back in 2012, and Coinbase was one of the co-founders of USDC. Nemil Dalal , the partner in charge of YC's crypto business, was previously Coinbase's product director. This close relationship may have naturally led YC to trust and support the USDC ecosystem more.

Venture capital's "Nokia moment"

In fact, using stablecoins is not new in the crypto VC world; companies like Paradigm and a16z Crypto have been using them on a "special case" basis for a long time. But Y Combinator's breakthrough lies in the fact that it is the "godfather of mainstream venture capital," and more than 90% of its investments are in AI, enterprise services, or consumer products, rather than cryptocurrency companies.

Previously, venture capitalists used stablecoins out of necessity when founders couldn't open USD accounts; now, Y Combinator has proactively included this option in every founder's standard contract template. Whether you're building a large-scale business or in biopharmaceuticals, you can directly receive USDC if you want. This streamlined and standardized process signifies that the venture capital industry is entering its "Nokia moment"—traditional money transfer models are being decisively defeated.

Will other VCs follow suit?

Currently, top Silicon Valley VCs are diverging in their attitudes toward crypto. a16z crypto represents the "radical" approach, having raised $15 billion in funding in early 2026, focusing on investments in AI and crypto; while Y Combinator represents the "pragmatic" approach, starting with payments, and is not radical but extremely conservative.

Many traditional VCs may still be on the sidelines, but history provides a clear reference. It typically takes traditional financial institutions 3 to 5 years to go from skepticism to embracing: Goldman Sachs and JPMorgan Chase both went through the process of calling it "fraud" before launching related services.

According to an a16z report , 90% of financial institutions are currently integrating stablecoins. Stablecoin trading volume reached $46 trillion in 2025, nearly three times that of Visa. Market predictions suggest that the circulating supply of stablecoins will exceed $1 trillion in 2026. Behind these figures lies an irreversible trend. YC's decision may just be one point in this stablecoin wave.

What kind of entrepreneurs is YC looking for?

Applications are now open for Y Combinator's Spring 2026 Incubator Program, which will be held in San Francisco from April to June. The application deadline is 12:00 PM Pacific Time on February 10th, and 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. The initiative emphasizes the desire to fund on-chain startups in the following areas: stablecoin applications, tokenization and trading (new credit markets, on-chain capital formation, new trading interfaces), and apps and agents (including social, financial, collaborative, and gaming apps).

Fourteen years ago, YC's investment in Coinbase was a bet on the future; fourteen years later, YC's use of USDC is about becoming the future.