Coinbase Invests In Circle: USDC Welcomes 6 More Blockchains | UseTheBitcoin



Coinbase is diving deeper into the stablecoin world by securing a stake in Circle, the company responsible for USDC, a leading stablecoin. As a part of this development, the Centre Consortium, a partnership between Circle and Coinbase overseeing USDC, will be disbanded. Circle will take the helm, managing USDC’s issuance and governance by itself.

Coinbase’s new involvement doesn’t mean they are buying a majority of Circle. Instead, they’re just taking a small share. However, the exact portion remains undisclosed. And while there’s a lot of talk about money, Coinbase didn’t buy this stake with cash.

USDC is expanding its reach too. It will now be supported on six more blockchains, swelling the total to 15. Though the exact names of these blockchains haven’t been released, previously Circle mentioned its intention to incorporate Polkadot, Near, Optimism, and Cosmos in 2023. Interestingly, right after this, Coinbase introduced its blockchain named Base.

This change in the stablecoin landscape comes at a time when financial big-hitters like PayPal are entering the scene with their stablecoin offerings. PayPal’s PYUSD, backed by Paxos, is viewed as a potential rival to stablecoins like USDT and USDC. But Phil McDonnell of Coinbase sees this more as an opportunity than competition. “Crypto is a small fish in the big financial ocean,” says McDonnell. He believes many newcomers to crypto, even if they start with PayPal, might soon explore other platforms, including Coinbase.

The world of stablecoins, however, is still figuring out its stance on regulations. Dante Disparte from Circle hints that things are becoming clearer. He references the 2023 Clarity for Payment Stablecoins Act, which is gaining traction in the U.S. Congress. Recently, Circle also achieved a significant licensing milestone in Singapore.

Disparte expressed, “It’s the right time to dissolve the Centre Consortium. With the rise of major players like PayPal and clearer regulations, a self-governing stablecoin entity isn’t as crucial.”

Circle has been active beyond these developments. Last year, they secured $400 million from major asset firms like BlackRock and Fidelity Investments. Recently, they’ve also refocused on their main business operations, even if it meant reducing staff.

Concluding, both Coinbase and Circle expect to profit from the interest earned on USDC reserves. A recent blog post clarified that the interest will be divided based on the USDC amounts on each platform. They also plan to split the income generated from the broader USDC circulation equally.



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