Coinbase, the largest US crypto exchange, has acquired a stake in Circle, the issuer of USD Coin (USDC), the second-largest stablecoin in the world. The deal coincides with the closure of the Centre Consortium, a joint venture between Coinbase and Circle that governed USDC.
Coinbase and Circle end their partnership
The terms of the agreement between Coinbase and Circle were not disclosed, except that no cash was involved. Both companies said that they would continue to share revenue from USDC’s reserves interest based on their holdings and usage of the stablecoin.
The deal also marks the end of the Centre Consortium, which was established in 2018 by Coinbase and Circle to create a standard for fiat-backed stablecoins.
The consortium aimed to welcome other members as potential issuers of USDC, but none joined.
Circle said that dissolving the consortium was a natural step in light of the growing regulatory clarity for stablecoins in the US and other jurisdictions.
The company cited the Clarity for Payment Stablecoins Act, a proposed bill that would regulate stablecoins as electronic money, and its Payment Institution License in Singapore, which allows it to offer payment services across Asia.
Circle to expand USDC’s reach and utility
Circle also announced that it would expand USDC’s support to six additional blockchains, bringing the total number of supported chains to 14.
While Circle previously mentioned Polkadot, Near, Optimism, and Cosmos as some of the new chains, Coinbase revealed its own blockchain called Base as another one.
Circle said that expanding USDC’s interoperability will enable more use cases and innovation in the crypto ecosystem, especially in decentralized finance (DeFi) and non-fungible tokens (NFTs).
The company also said it will introduce new features and services for USDC, such as lending, savings, payments, and treasury management.
Circle recently raised $400 million in a funding round that included investments from BlackRock and Fidelity.
The company is also planning to go public through a merger with a special purpose acquisition company (SPAC) later this year.
Coinbase sees USDC as a global digital currency
Coinbase’s Senior Director of Product Management, Phil McDonnell, said that Coinbase sees USDC as more than just a stablecoin for crypto trading.
According to him, USDC could be a global digital currency that enables foreign exchange, international fund transfers, and financial inclusion.
He added that Coinbase’s aim was to grow the crypto ecosystem, not to compete with other players like PayPal, which recently launched its own stablecoin called PYUSD in partnership with Paxos.
