Circle to Take Over USDC Governance, Coinbase Buys Stake
Posted by Colin Lambert. Last updated: August 23, 2023
Stablecoin issuer Circle says it will launch its USDC stablecoin on six new blockchains from September as part of a shake-up of how it manages the digital asset – in addition to the changes, Coinbase, which launched USDC with Circle under the banner Centre Consortium in 2018, is taking an undisclosed stake in Circle.
The two companies have agreed that a separate governance body like Centre Consortium is no longer required thanks to the “growing regulatory clarity for stablecoins in the US and around the world”. Therefore, Centre will no longer exist as a stand-alone entity and Circle will remain as the issuer of USDC, bringing any Centre governance and operations responsibilities in-house.
Circle says the new structure will streamline the operations and governance, and enhance the direct accountability of Circle as the issuer, including holding all the smart contract keys, complying with regulations on governance of reserves and enabling USDC on new blockchains.
Given the “rapid pace” of blockchain innovation, with breakthroughs in speed, security and scalability, Circle says USDC will be launching on six new blockchains between September and October, bringing multi-chain access of USDC up to 15 and accelerating USDC’s momentum with developers around the world.
“Support for new chains allows USDC to better serve a growing number of businesses, applications, and developer communities who are choosing USDC as the on-chain dollar,” the two companies write in a blog post.
Following the acquisition of the undisclosed stake by Coiinbase, the two firms say they will continue to generate revenue from USDC reserves interest income. Under the new arrangement, this revenue will continue to be shared based on the amount of USDC held on each of their platforms, and additionally they will now equally share in interest income generated from the broader distribution and usage of USDC.
“We believe that stablecoins can advance the real-world utility of crypto and help make the global financial system more open and inclusive,” the firms conclude. “Together, we look forward to unlocking additional value by growing the USDC ecosystem, circulation and global adoption.”