Cryptocurrency NewsCircle to Assume Full Governance of USDC Following Enhanced Regulatory Clarity

Circle to Assume Full Governance of USDC Following Enhanced Regulatory Clarity

Circle will assume complete governance and operational duties after a period of five years, facilitated by a clearer regulatory environment. On August 21, Coinbase and Circle announced modifications to their existing partnership through identical blog posts on their respective websites. The two companies had initially co-launched the USD Coin (USDC), a stablecoin, and jointly managed it via the Centre Consortium.

The Centre Consortium is set to be dissolved, with all operational and governance aspects being managed internally. Circle’s role will be expanded, including the holding of smart contract keys and ensuring regulatory compliance.

The shift in responsibilities was attributed to a more transparent regulatory framework surrounding stablecoins in the U.S. and globally, negating the need for a separate governing body like the Centre Consortium. Jeremy Allaire, Circle’s co-founder, and CEO, mentioned in an X (formerly Twitter) thread that Circle and Coinbase are strengthening their business ties, with Coinbase acquiring an equity stake in Circle. The specific value of the stake was not disclosed.

The blog posts highlighted that the rearrangement will further align the companies strategically and financially. The interest revenue generated from the stablecoin will still be split between both firms based on their respective holdings. Launched in 2018, USDC is the second-largest stablecoin by market cap at $26 billion, trailing only Tether (USDT) which has a market cap of $83 billion. Circle is also preparing for competition from PayPal’s newly introduced stablecoin, PYUSD, which was launched on August 7.

Additionally, the blog posts revealed that USDC will be supported on six additional blockchains in the coming months of September and October. While the specific blockchains were not named, previous announcements indicate USDC’s expansion to platforms like Polkadot, Optimism, Near, Arbitrum, and Cosmos.


Join us

- Advertisement -