Coinbase and Circle Internet Financial have announced that Coinbase is buying a minority stake in Circle and the companies are dissolving their Centre Consortium partnership that had issued USD Coin (USDC), the world’s second-largest stablecoin. As part of the move, Circle will bring issuance and governance of USDC fully in-house. Additionally, six more blockchains will gain native support for USDC, bringing the total number of supported blockchains to 15.
Not only are we at a point where we can retire the Centre Consortium, but doing so makes perfect sense because of clarity in the marketplace around regulating stablecoins, said Circle Chief Strategy Officer and Head of Global Policy Dante Disparte.
Circle also sold stakes last year, raising $400 million from a group including asset managers BlackRock and Fidelity Investments. Last month, Circle announced it was cutting some of its workforce in order to maintain a strong balance sheet and focusing on core business activities.
Coinbase and Circle will continue to generate revenue from USDC reserves interest income. Under the parties’ new arrangement, this revenue will continue to be shared based on the amount of USDC held on each of their platforms, and they will now equally share in interest income generated from the broader distribution and usage of USDC.