Key Points:
- Coinbase and Circle have announced new terms for the governance and funding of the USDC stablecoin.
- Under the new terms, Coinbase will acquire an equity stake in Circle, and the Centre Consortium will be shut down.
- Circle will be launching USDC on six new blockchains to increase adoption.
- The size of Coinbase’s stake in Circle and the specific blockchains for USDC’s introduction are still unknown.
- The new agreement will see income generated through interest equally shared from off-platform USDC.
- The shuttering of Centre is a major change for USDC, which initially aimed to be part of a global payments network.
- USDC’s governance will now shift under Circle, as governments develop and adopt stablecoin legislation.
- Both Coinbase and Circle face the challenge of spurring growth for USDC amidst competition from other stablecoins.
Hot Take:
The new terms between Coinbase and Circle mark a significant shift in the governance and funding of the USDC stablecoin. By acquiring an equity stake in Circle and shutting down the Centre Consortium, the two entities are adapting to the changing dynamics of the stablecoin market and regulatory landscape. Circle’s plans to launch USDC on six new blockchains demonstrate their commitment to increasing adoption. However, the lack of details regarding Coinbase’s stake and the specific blockchains raises some uncertainties. The closure of Centre and the shift of governance to Circle reflect the evolving regulatory environment for stablecoins. Moving forward, Coinbase and Circle will need to find strategies to spur the growth of USDC amidst fierce competition, such as Tether and PayPal’s PYUSD stablecoin.
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