Coinbase to invest in Circle, shut down jointly managed Centre
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FILE PHOTO: A representation of the cryptocurrency is seen in front of Coinbase logo in this illustration taken, March 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) - Coinbase Global said on Monday it would acquire an equity stake in cryptocurrency operator Circle Internet Financial and shut down their jointly managed Centre Consortium, the operator of the stablecoin, USD Coin (USDC).
With growing regulatory clarity for stablecoins in the United States and around the world, the requirement of a separate governance body like Centre is no longer needed, Coinbase said in a blog post.Circle will take full control over USDC issuance and governance. Earlier, it was only the issuer of the stablecoin.Stablecoins are crypto tokens whose value is pegged to a stable asset to protect from wild volatility. In the case of the USDC, the value was pegged to the dollar.
The company is launching USDC on six new blockchains between September and October, bringing the multi-chain access of USDC up to 15.
Coinbase and Circle will continue to generate revenue from USDC reserves interest income and under a new arrangement, revenue will continue to be shared based on the amount of USDC held on each of the companies' platforms.
"We will now equally share in interest income generated from the broader distribution and usage of USDC," Coinbase added.
(Reporting by Pratyush Thakur in Bengaluru; Editing by Maju Samuel)
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