Coinbase And Circle Committed To Strengthen USDC Stablecoin Issuance

Coinbase bought Circle's share equity to strengthen USDC governance. (Photo; Doc. Theblockcrypto)

JAKARTA - In a strategic move that has attracted attention in the crypto ecosystem, the leading crypto exchange company Coinbase has taken equity shares in the Circle. These two companies have the same goals: strengthening their control over the issuance and governance of USDC (USD Coin), as well as related revenues.

On Monday, August 21, Circle CEO Jeremy Allaire and Coinbase CEO Brian Armstrong jointly announced this important change in a blog post. Although details about Coinbase's equity holdings at Circle have not been disclosed, this move demonstrates the company's strong commitment to taking steps forward in the development and management of USDC stablecoins.

One of the key aspects of this change is the closure of the Center Consortium, a volunteer governance group that has been around for five years to oversee USDC. In their new approach, Circle and Coinbase will take governance and operations directly into their company. This will help streamline operations, increase accountability, and ensure stronger control over USDC issuance and governance.

Along with these changes, USDC will also launch itself on six new blockchains to be determined in September. The move will expand USDC coverage and increase its accessibility on multiple platforms.

Circle, as a USDC issuer, will take full control of the issuance and governance of this stablecoin, in accordance with the agreements already reached. Revenue generated from USDC will be fairly divided based on the amount of USDC stored on each platform, including interest income generated from wider distribution and use.

The move also reflects a shift in views on stablecoin regulation in the United States and around the world. With increased regulatory clarity for stablecoins, as Armstrong and Allaire noted, separate governance bodies such as the Center are no longer needed. Both believe that stablecoins have the potential to advance crypto real use and contribute to openness and inclusiveness in the global financial system.

This change comes weeks after PayPal introduced its own stablecoin, PayPal USD, which is a direct competitor to USDC. The move also marks the first time conventional financial companies in the United States have launched their own stablecoins.

As a major step that has an impact on the crypto world, the partnership between Circle and Coinbase demonstrates their commitment to advancing stablecoin adoption and development as well as playing an important role in strengthening the crypto ecosystem as a whole.