In a startling development within the cryptosphere, Coinbase, a notable cryptocurrency exchange, has acquired a minority stake in Circle Internet Financial, a peer in the industry. Alongside this value transaction, both firms wound up their Centre Consortium, which was associated with issuing USD Coin (USDC). A blog post shared by the CEOs of the two companies detailed the dissolution of Centre Consortium as a response to greater regulatory clarity worldwide.
USDC, introduced in late 2018, holds a peg with the value of the U.S. dollar. This assures a steady $1 price through reserves composed of dollar-equivalent assets. Circle was the initial order-giver of the idea, but it was Centre Consortium, an independent governance body, that ensured the oversight of the token. With the partnership between Coinbase and Circle, USDC was launched with Coinbase playing the part of the distributor.
While there were whispers about Coinbase’s non-monetary investment to Circle for the stake, the exact bit of equity and particulars are still under wraps. Despite the dissolution of Centre Consortium, the companies have announced an exciting partnership.
The revamped structure requires Circle to step up as the sole issuer of USDC, a move set to streamline operations, enhance governance, and put a greater onus on Circle. Alongside issuing USDC, Circle will also hold control of the reserve governance regulations, smart contract keys, and facilitate the integration of USDC on various emerging blockchains.
These ordering changes also impact revenue distribution. Earlier, the division of income was determined by the amount of USDC distributed and held on each company’s platform. The new focus will be the quantity of USDC retained on individual platforms — a profound shift in crypto economics.
Additionally, a mutual sharing of interest income arising from the extensive circulation and use of USDC is expected, which negates the importance of which company originally issued it. A clear indication of broader adoption of stablecoins in the crypto economy.
Finally, upgrades for USDC are underway, with its debut on six additional blockchains due by October. The networks, however, remain a secret, enhancing anticipation among investors and users. The expansion will extend USDC across a total of 15 discrete networks. Coinbase and Circle just gave USDC a massive fillip.
No specifics about the six new blockchains have been revealed, though it is noted that a previous announcement from Circle divulged plans to incorporate several potential networks and Cosmos down the line in 2023.
Gaining these insights, it becomes clear why Coinbase’s belief in the critical role of stablecoins in the wider crypto economy led to its minority stake in Circle. The broader ecosystem eagerly awaits the fruit of this strategic alliance and the growth of USDC.
Source: Cryptonews
