USD Coin Adds Six Blockchains and Coinbase Buys Circle

USD Coin Adds Six Blockchains and Coinbase Buys Circle

A well-known bitcoin company called Coinbase is in the process of buying a small share of Circle Internet Financial. At the same time, both organizations have chosen to end their relationship within the Centre Consortium, which put out USD Coin (USDC), the second-largest stablecoin in the world.

As part of this plan, Circle will take full responsibility for producing and governing USDC, putting these tasks under its own control. Furthermore, a substantial growth is occurring, and USDC is undergoing direct addition to six additional blockchains. With this change, there will be 15 blockchains that work with it. This will increase its spread.

Even with these changes, Coinbase is still not saying how much of the company it owns. Coinbase and Circle shared this news in a blog post, incorporating information obtained from discussions with CoinDesk. A knowledgeable source stated that there were no cash exchanges between Coinbase and Circle during this purchase.

Coinbase and Circle haven’t said what the names of the six new blockchains are. (In a previous comment from September, Circle said that it planned to combine Polkadot, Near, Optimism, and Cosmos in 2023. Coinbase has since come out with its own blockchain called Base.)

Stablecoins linked to the US dollar have undergone significant changes recently. PayPal, a prominent player in financial technology, has entered the arena with its own PYUSD coin, developed in collaboration with Paxos. Because PayPal has a lot of links in the world of payments and money transfers, this move could hurt the popularity of Tether’s USDT and USDC.

Coinbase’s goal for USDC goes far beyond just selling cryptocurrencies. According to Phil McDonnell, the Senior Director of Product Management at Coinbase, USDC could serve purposes beyond crypto markets. He believes it has potential applications in foreign exchange, cross-border fund transfers, and facilitating financial inclusion. But he played down the idea of going head-to-head with PayPal.

PayPal’s PYUSD ‘grows the pie’

In an interview with CoinDesk, McDonnell said, “I really believe that PayPal’s involvement makes the cryptocurrency market bigger and better.” He emphasized that cryptocurrencies’ current scope is constrained when contrasted with the wider landscape of the financial world. Whether they join through PayPal or some other way, the influx of new people could bring them to different parts of the crypto world, such as sites like Coinbase.

Dante Disparte, who is the Chief Strategy Officer and Head of Global Policy at Circle, says that regulations for stablecoins are still in their early stages. But there are signs that things are getting clearer. Disparte brought up the Clarity for Payment Stablecoins Act of 2023, which has backing from both Democrats and Republicans in a key House of Representatives committee. He also highlighted the recent attainment of a Major Payment Institution License in Singapore by Circle.

“We have reached a point where dissolving the Centre Consortium is not only possible, but also makes sense,” Disparte said in a talk with CoinDesk. “This is because the regulatory landscape for stablecoins has become clearer.” He pointed out that big players like PayPal have joined the market, and that the regulatory system has changed to the point where it doesn’t make sense to keep the Centre Consortium’s structure for a stablecoin group that regulates itself.

BlackRock, Fidelity

In the past year, Circle also sold its stock stakes and was able to raise $400 million. All through investments from companies like BlackRock and Fidelity Investments, which are big names in asset management. Both of these groups have recently gotten a lot of press for trying to start exchange-traded funds for spot bitcoin.

Circle made a big announcement last month. It was cutting workers to improve finances and focus on essential company activities.

The blog post goes on to say that Coinbase and Circle will continue to make money from the interest that the USDC funds earn. The amount of USDC held on each platform will decide how much of the income will be shared. Under the new plan, they will also share equally in the interest income. Income this that comes from the greater use and spread of USDC.


About Ylleza Jashari

Senior student pursuing a degree in Security Studies at Rochester Institute of Technology. In my role as a Content Writer at Walletor, my primary objective is to develop informative content that effectively educates all Walletor users on the most up-to-date insights pertaining to financial transactions, digital wallets, and the broader cryptocurrency industry.

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