- Centre Consortium, responsible for overseeing USDC will be dissolved
- USD Coin is set to be embraced by six new blockchains in the coming months,
Cryptocurrency giant Coinbase Global has unveiled a strategic maneuver that involves an equity stake acquisition in Circle Internet Financial. As part of this development, the collaborative management entity called the Centre Consortium, responsible for overseeing the widely used stablecoin USD Coin (USDC), will be dissolved.
This move is in response to the growing clarity in regulatory frameworks for stablecoins in the United States and globally. In light of this, Coinbase has asserted that a distinct governing body like the Centre is no longer indispensable.
“Circle and Coinbase have agreed that with growing regulatory clarity for stablecoins in the U.S. and around the world, the requirement of a separate governance body like Centre is no longer needed,” the announcement reads
The reins of USDC issuance and governance will now be exclusively in the hands of Circle, signifying a significant shift in the landscape. Previously, both Coinbase and Circle were instrumental in launching the USD Coin back in 2018 and have since jointly administered it via the Centre Consortium. However, the prevailing regulatory environment has prompted them to rethink this approach.
Circle will emerge as a key player in this new structure, taking on pivotal responsibilities such as safeguarding smart contract keys and ensuring adherence to regulatory standards.
The move is not solely operational but also marks a deeper business integration. Circle’s CEO, Jeremy Allaire, highlighted this evolution in a social media post, underscoring the equity stake acquisition by Coinbase in Circle. Though precise financial details remain undisclosed, this equity investment showcases Coinbase’s commitment to strengthening its ties with Circle.
In an expansionary move, it was revealed that USD Coin is set to be embraced by six new blockchains in the coming months, broadening its presence to a total of 15 blockchains. Although the specific blockchains weren’t named in the official communication, Circle had previously outlined its intention to integrate with platforms like Polkadot, Near, Optimism, and Cosmos during 2023.
This strategic realignment comes on the heels of PayPal’s recent foray into the stablecoin arena with PayPal USD (PYUSD), which debuted earlier this month. USDC, boasting a market capitalization of approximately $26 billion according to CoinGecko, secures its position as the second-largest stablecoin by market capitalization.