The Centre Consortium Dissolves as Coinbase Takes Stake in Circle
The Centre Consortium, jointly managed by Circle and Coinbase, is being shut down and Circle is bringing issuance and governance of the USDC stablecoin in-house. As part of this move, Coinbase is acquiring a minority stake in Circle. Additionally, USDC will be supported on six more blockchains, bringing the total to 15. The specific blockchains were not disclosed. PayPal’s recent introduction of its own stablecoin, PYUSD, could potentially challenge the dominance of USDT and USDC. However, Coinbase sees PayPal’s entry as an opportunity to expand the crypto market. Regulation of stablecoins is evolving, with recent legislation and clarity emerging. Circle recently obtained a Major Payment Institution License in Singapore.
Coinbase’s Stake in Circle
– Coinbase is acquiring a minority stake in Circle Internet Financial.
– The exact size of the stake has not been disclosed.
– Coinbase did not pay cash for the stake.
USDC Expansion
– Circle will bring issuance and governance of USDC in-house.
– USDC will be supported on six additional blockchains, bringing the total to 15.
– The specific blockchains were not revealed.
Competition with PayPal
– PayPal’s introduction of PYUSD is seen as an opportunity to expand the crypto market.
– Coinbase believes that attracting more users to crypto, even through PayPal, will eventually lead them to Coinbase.
Regulation of Stablecoins
– The Clarity for Payment Stablecoins Act of 2023 provides some regulatory clarity.
– Circle recently obtained a Major Payment Institution License in Singapore.
– The dissolution of the Centre Consortium is a result of increased clarity in the stablecoin regulatory landscape.
Revenue Sharing
– Coinbase and Circle will continue to generate revenue from USDC reserves interest income.
– The revenue will be shared based on the amount of USDC held on each platform.
– Interest income generated from the broader distribution and usage of USDC will now be equally shared.
Hot Take
The dissolution of the Centre Consortium and Coinbase’s stake in Circle highlight the growing competition and evolution of the stablecoin market. With the expansion of USDC to more blockchains and the entry of players like PayPal, the future of stablecoins is expanding beyond just crypto trading. The regulatory landscape is also becoming clearer, providing a more stable foundation for the industry. Circle and Coinbase’s revenue-sharing arrangement demonstrates their commitment to the continued growth and adoption of USDC.
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