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Both parties will continue to generate revenue from USDC reserves interest income.
American crypto exchange Coinbase and Circle have decided to shut down their Centre Consortium partnership. The partnership, which was co-founded by the duo in 2018, had been responsible for issuing the world’s second-largest stablecoin – the USD Coin (USDC).
Coinbase and Circle Make New Arrangements
The agreed dissolution appears to be part of a larger scheme by Circle to bring the issuance and governance of USDC fully in-house. That is even as Coinbase itself reportedly gets a minority stake in Circle.
As of publication, there is no official confirmation of the amount of stake Coinbase has acquired. But according to inside sources, Coinbase did not have to pay any cash to Circle to acquire the stake.
For what it’s worth, dissolving the consortium may be Circle’s strategy to maintain a single business face. Especially considering how talks of clarity are consistently emerging in the early stages of stablecoin regulations.
As noted by Circle Chief Strategy Officer and Head of Global Policy Dante Disparte, the Clarity for Payment Stablecoins Act of 2023 has already won bipartisan support on a key committee in the US House of Reps. So, it is only necessary for Circle to keep its house in order. Disparte said:
“Not only are we at a point where we can retire the Centre Consortium, but doing so makes patent sense because of clarity in the marketplace around regulating stablecoins.”
Coinbase and Circle, in a blog post, have said both parties will continue to generate revenue from USDC reserves interest income. The post confirms that there is already a new arrangement to that effect and that each party will get revenue according to the amount of USDC held on their platforms. But most importantly, Coinbase and Circle will now equally share in interest income generated from the broader distribution and usage of USDC.
USDC Adds 6 Blockchains
In closely-related news, USDC is now supported on six more blockchains. That brings the total count to 15 blockchains that currently support the stablecoin which is pegged to $1. And though Circle may have not disclosed the new blockchains, it hinted back in September about adding Polkadot, Optimism, Near, and Cosmos this year. Besides, Coinbase also recently launched its own blockchain called Base.