Prominent cryptocurrency exchange Coinbase has acquired a minority stake in Circle Internet Financial, the issuer of the USDC stablecoin. The size of the stake that Coinbase acquired was not disclosed.
“The nature of the investment means that Coinbase and Circle will now have even greater strategic and economic alignment on the future of the financial system,” Coinbase said in a blog post.
Circle to Bring Issuance of USDC Fully In-House
As part of the deal, the Center Consortium, which Circle and Coinbase jointly managed, will be dissolved, and Circle will bring the issuance and governance of USDC fully in-house. Previously, Circle only issued the stablecoin.
“With growing regulatory clarity for stablecoins in the U.S. and around the world, the requirement of a separate governance body like Center is no longer needed,” Coinbase said.
Coinbase noted that the new structure for USDC will help streamline the operations and governance and “enhance the direct accountability” of Circle as the issuer. As part of the development, Circle will now hold all the smart contract keys for USDC. Additionally, the new structure will allow Circle to comply with regulations on the governance of reserves and enable USDC on new blockchains.
USDC to Launch on Six New Blockchains
Coinbase also revealed that USDC will launch on six new, undisclosed blockchains between September and October, bringing the number of USDC-supported chains to 15. The crypto exchange noted that support for new blockchains allows USDC to better serve more clients who use the stablecoin as their on-chain dollar.
The exchange stated that it and Circle will continue to generate revenue from USDC reserves interest income, which will be shared based on the amount of USDC held on each party’s platforms. Both companies will equally share income on interest earned from the distribution and usage of USDC.
Launched in 2018, USDC is the second-largest stablecoin and the sixth-largest cryptocurrency, with a market cap of $26 billion, according to CoinMarketCap.
