Cryptocurrency exchange Coinbase (COIN) is getting a minority stake in Circle Internet Financial 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.
Also, six more blockchains will gain native support for USDC, which is pegged to $1, bringing the total number of supported blockchains to 15.
Coinbase and Circle, in a blog post and interviews with CoinDesk, didn’t disclose how big a stake Coinbase got. Coinbase did not give Circle cash for the stake, according to a person familiar with the matter.
Coinbase and Circle did not identify the six additional blockchains. (Back in September, Circle said it planned to add Polkadot, Near, Optimism and Cosmos in 2023. Subsequent to that, Coinbase started its own blockchain called Base.)
There have been recent tectonic shifts in the world of dollar-pegged stablecoins. Most recently, fintech giant PayPal took a step to shake up the dominance of Tether’s USDT and USDC by introducing its own PYUSD token, in association with Paxos; PayPal could prove a worthy adversary given its deep ties in payments and remittances.
From Coinbase’s perspective, the future of USDC stretches far beyond crypto trading, into areas like foreign exchange, transfers of funds across borders and financial inclusion, according to Phil McDonnell, senior director of product management at Coinbase. But he played down any competition with PayPal.
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