Coinbase, one of the leading crypto exchanges, has officially acquired an equity stake in Circle, the issuer of the USDC stablecoin. The acquisition was announced in a joint press release by both companies. However, the agreement between Coinbase and Circle marks a significant shift in the governance and operations of USDC. Circle will remain the issuer of USDC, taking full control over its issuance and governance. The Centre Consortium, a jointly managed self-governance body for USDC, will no longer exist as a stand-alone entity, and Circle will assume all governance and operations responsibilities in-house.
The nature of the investment ensures that both companies have a shared interest in the long-term success of the stablecoin ecosystem and USDC. The revenue generated from USDC reserves interest income will continue to be shared equally based on the amount of USDC held on each platform.
USDC to launch on six new blockchains, expanding global reach
USDC will be launching on six new blockchains between September and October. This expansion will bring the total multi-chain access of USDC up to 15, allowing it to better serve businesses, applications, and developer communities worldwide.
The launch on new blockchains is part of a broader effort to grow the USDC ecosystem and increase its global adoption. The commitment to principles such as 24/7 usability, wide availability, stability, and 1:1 backing with transparent and safe reserves emphasizes the role of stablecoins in serving the public interest.
The expansion of USDC comes at a time when traditional payments giant, PayPal, announced its plans to launch a stablecoin. The new stablecoin will be fully backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents, reflecting the growing interest in the stablecoin market.
Coinbase and Circle’s agreement and the subsequent expansion of USDC are part of a broader trend in the crypto industry. The collaboration between the two companies began five years ago with the joint launch of USDC. Since then, stablecoins have proven to be a critical element of the crypto industry, enabling users worldwide to access U.S. dollars and other currencies with the benefits of crypto.
Earlier this month, Coinbase reported earning $151 million in USDC stablecoin interest income, which was lower than the $199 million generated in the previous quarter. Coinbase attributed this decline to a 28% decrease in USDC market cap.
Source: https://www.cryptopolitan.com/coinbase-acquires-stake-in-circle/