- Circle will now be responsible not only for issuing USDC, but also for its governance
- They are closing down Centre Consortium, which they managed jointly
Coinbase Global will acquire an equity stake in cryptocurrency operator Circle Internet Financial, who issues the stablecoin USD Coin (USDC). They are closing down Centre Consortium, which they managed jointly, Reuters reported.
Circle will take control of USDC governance
In a blog post, Coinbase said stablecoin regulatory clarity was growing in the United States and the existence of a separate governance body like Centre was not necessary anymore. Circle will now be responsible not only for issuing USDC, but also governing it.
Six new blockchains will be launched
USDC will be launched on six new blockchains in September and October, with which the stablecoin will be available on a total of 15 blockchains. Circle announced plans to add Cosmos, Near, Polkadot, and Optimism in 2023. Coinbase launched Base thereafter.
Sharing revenue from the broader use of USDC
Circle and Coinbase will continue to earn revenue from interest on USDC reserves. They will share revenue based on how much USDC each company holds, as before. Coinbase stated the partners would share the interest equally, which would be generated from distributing and using the stablecoin more broadly.
Competition with PayPal?
Fintech giant PayPal recently launched the stablecoin PYUSD in partnership with Paxos. Considering its extensive experience in money transfers, PayPal could turn out to be a worthy adversary.
Coinbase finds the future of USDC to be in areas such as foreign exchange, international fund transfers, etc. However, product management director Phil McDonnell denied plans to compete with PayPal. He told CoinDesk in an interview that crypto was still very small compared to the overall financial world and it would now be most effective to bring people in. It didn’t matter whether they came through PayPal or another way.
The evolution of stablecoin regulation
According to Dante Disparte, Circle Chief Strategy Officer, stablecoin regulation clarity is evolving. He reminded that the Clarity for Payment Stablecoins Act of 2023 received support from both parties in the US House of Representatives.
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