Circle Takes Charge of USDC, Coinbase Secures Minority Share

Coinbase secures a minority stake in Circle, enabling Circle to oversee USDC operations for increased stability and growth.

by Brian Danga. Fact checked by: Finn Miller, Editor: Stefan Trapp

Published: August 22, 2023 │ 11:40 AM GMT

Brian Armstrong happy, Jeremy Allaire coming out the circle with open arms. — *Created by Kornelija Poderskytė from DailyCoin*

Coinbase has signed a new partnership.
The company acquired a minority stake in Circle.
The partnership will see Circle take on new responsibilities regarding USDC governance.

In a strategic move, crypto exchange Coinbase has acquired a minority stake in Circle Internet Financial. The announcement was shared by the two companies on their respective websites.

The Deepening Commercial Relationship

As part of the move, the two companies have agreed to dissolve their Centre Consortium partnership, a venture that exits the market after five years at the helm of USDC governance due to the emergence of stablecoin regulations worldwide. The issuance and governance of USDC will now be done in-house, with Circle assuming enhanced responsibilities.

“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 the governance of reserves, and enabling USDC on new blockchains,” read the announcement.

Now, with regulatory clarity coming for stablecoins all around the world, including in the US, there's no longer the need for such a structure.

But meanwhile, USDC has become a foundational pillar of the on-chain economy, and a significant business for both companies.
— Jeremy Allaire (@jerallaire) August 21, 2023

Following the new partnership agreement, Coinbase and Circle will continue deriving revenue from USDC reserves interest income, where profits will be shared based on individual stablecoin holdings.

USDC Expansion

The announcement disclosed that USDC will soon be launching on six new blockchains between September and October. While the statement didn’t name the exact platforms, Circle announced in September 2022 that USDC would launch as a native stablecoin on Cosmos (ATOM), Polkadot (DOT), Optimism (OP), Arbitrum (ARB), and NEAR (NEAR) blockchains.

USDC is available natively on Ethereum (ETH), Solana (SOL), Avalanche (AVAX), Flow (FLOW), Stellar (XLM), TRON (TRX), Algorand (ALGO), and Hedera (HBAR). Being the second largest stablecoin with a market cap of $26 billion, the new Coinbase-Circle partnership will likely propel the growing USDC ecosystem to new circulation and global adoption heights.