- Coinbase has acquired a stake in USDC issuer Circle, resulting in the dissolution of Centre Consortium.
- This governance change corresponds with Circle’s expansion onto new blockchains and considerations of evolving regulations
- The move underscores the commitment to stablecoin growth by the two companies and highlights USDC’s evolving role in shaping the crypto landscape
Coinbase has acquired a stake in USDC issuer Circle which will lead to the dissolution of USDC issuer Centre Consortium. The governance changes tie in with Circle’s expansion onto six new blockchains for USDC and have an eye on the regulatory landscape. With the move, Circle hopes to bolster its engagement with developers and cater to businesses and applications adopting it as their on-chain dollar at a time when stablecoins are coming under more scrutiny than ever before.
Circle Will Sole USDC Issuer
Coinbase and Circle announced the governance shift in a blog post yesterday, in which Circle boss Jeremy Allaire and Coinbase CEO Brian Armstrong outlined the changes being made and the rationale. Currently, the Centre Consortium manages USDC’s self-governance but will be dissolved as a stand-alone entity, with Circle will taking on the mantle of USDC issuance, consolidating governance responsibilities and operations. This streamlined approach is expected to enhance accountability and regulatory compliance.
Additionally, Coinbase has taken an equity stake in Circle which Armstrong says signifies Coinbase’s commitment to the stability and growth of the stablecoin ecosystem. Both companies will continue to earn revenue from USDC reserves interest income, with the revenue distribution based on the amount of USDC held on their platforms. Additionally, they will now share interest income generated from the broader distribution and usage of USDC.
USDC will be launching on six new blockchains over the next two months, bringing multi-chain access of USDC up to 15 chains in total following a similar expansion last year.
USDC Looks to Expand Universe
The expansion and restructuring of USDC represent a significant step forward in the evolution of stablecoins within the crypto landscape, with the statement reinforcing the positive outlook the two CEOs hold for the project:
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.
USDC is the second largest stablecoin by market cap, although it is some three times smaller than market leader USDT.
