(Reuters) – Coinbase Global announced on Monday that it will acquire an equity stake in cryptocurrency operator Circle Internet Financial and shut down their jointly managed Centre Consortium, which operates the stablecoin, USD Coin (USDC).
In a blog post, Coinbase stated that with the increasing regulatory clarity for stablecoins in the United States and globally, a separate governance body like Centre is no longer necessary. Circle will now have full control over USDC issuance and governance. Previously, Circle was only the issuer of the stablecoin.
Stablecoins are cryptocurrency tokens whose value is tied to a stable asset in order to prevent extreme volatility. In the case of the USDC, the value was pegged to the US dollar.
Furthermore, Coinbase plans to launch USDC on six new blockchains between September and October, expanding the multi-chain access of USDC to a total of 15 blockchains.
Under a new arrangement, Coinbase and Circle will continue to generate revenue from the interest earned on USDC reserves. The revenue will be shared based on the amount of USDC held on each company’s platforms. Coinbase stated, “We will now equally share in interest income generated from the broader distribution and usage of USDC.”
This acquisition and agreement between Coinbase and Circle marks a significant move in the cryptocurrency industry, as it allows for streamlined governance and further opportunities for revenue generation from stablecoins such as USDC.
Pratyush Thakur reporting in Bengaluru; Maju Samuel editing.
Credit: The Star : Tech Feed
