Coinbase (NASDAQ: COIN), the top crypto exchange in the United States, has taken an unknown amount of equity stake in stablecoin issuer Circle Internet Financial. Further, the two companies will shutter the jointly managed Centre Consortium, the self-governance consortium for USDC.
Restructuring of USDC Governance
Announced yesterday (Monday), the decisions were taken with the growing regulatory clarity around stablecoins in the United States. A blog post co-authored by Coinbase’s CEO Brian Armstrong and Circle’s CEO Jeremy Allaire highlighted that a separate governance body of USDC is no longer needed. Instead, Circle, which only issued USDC earlier, will now fully control the governance and issuance of USD-pegged stablecoin.
“The new structure will streamline the operations and governance, and enhance the direct accountability of Circle as the issuer, including holding all the smart contract keys, complying with regulations on governance of reserves and enabling USDC on new blockchains,” the blog post by the two CEOs stated.
Crypto-focused media Coindesk reported that Coinbase did not pay any cash in exchange for the stake in Circle.
Further, Circle and Coinbase will continue to generate revenue from USDC reserves interest income, which will be shared between them based on the amount of held USDCs.
Expansion of the Stablecoin
USDC stablecoin was launched in September 2018, which also marked the foundation of the Center Consortium. According to Coinmarketcap.com, USDC currently has a market cap of about $26 billion.
Already supported on multiple blockchain platforms, USDC is further going to expand its reach. With the new structure in place, the stablecoin will be launched on six more blockchains between September and October, taking the total number of supported blockchains to 15. Circle and Coinbase did not specify the names of the new blockchains. However, Circle earlier said that it was planning to add USDC on Polkadot, Near, Optimism, and Cosmos.
“We believe that stablecoins can advance the real-world utility of crypto and help make the global financial system more open and inclusive. Together, we look forward to unlocking additional value by growing the USDC ecosystem, circulation, and global adoption,” the blog post added.
This article was written by Arnab Shome at www.financemagnates.com.
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