There is some great news regarding Coinbase USDC - it has a new issuer! USDC is a popular stablecoin with a market cap of over $25 billion, and Circle is taking over as the new issuer.
Previously, Coinbase had some sort of ownership of this token. But the governance rights and control weren't among them. This new development means Circle and Coinbase, the entities behind Centre Consortium, have reached an agreement regarding the governance structure of USDC.
Furthermore, this move from Coinbase comes from the increasing crackdown between the Securities and Exchange Commission and crypto firms.
Coinbase is still battling a lawsuit with the SEC over operations as an unregistered crypto exchange. Recently, there have been reports of the SEC cracking down on stablecoins. Hence, Coinbase needed to clarify its operational structure regarding the USDC.
Circle USDC involvement means they have agreed with Centre to stop operating as a standalone entity for the stablecoins. In other words, Centre will cease to operate as the sole issuer of this stablecoin.
Apparently, Circle will now take full responsibility for overseeing the operations of USDC. Circle USDC agreement means it will now be the sole issuer of the stablecoin. Coinbase claims that the new development will help them improve operational efficiency, streamline governance, and reinforce Circle’s transparency as the issuer of USDC.
CEO of Circle Speaks
The CEO of Circle, Jeremy Allaire, took to Twitter (now X) to provide more insights about the situation. Apparently, the new development comes from a recent regulatory clarity they received from government regulators. Hence, there was a need to restructure the USDC governance and operations.
"Now, with regulatory clarity coming for stablecoins all around the world, including in the US, there's no longer the need for such a structure.
But meanwhile, USDC has become a foundational pillar of the on-chain economy, and a significant business for both companies," Allaire said.
1/ Some major news from @circle and @coinbase on the future of $USDC in this joint blog post from @brian_armstrong and I (@jerallaire). https://t.co/uHuxeRJtiI
— Jeremy Allaire (@jerallaire) August 21, 2023
Furthermore, he took the opportunity to make a new announcement regarding USDC. He said the stablecoin will now be launching on 6 major blockchains.
"With our new arrangement, Circle will maintain control over USDC issuance, governance, and product and technology -- with the immediate impact being that USDC is soon launching on 6 new blockchains," he added.
Coinbase CEO Brian Armstrong Speaks on the New Development
Coinbase CEO Brian Armstrong confirmed that USDC is extending their services to many other blockchains. Armstrong said he was happy to see their creation expanding to new heights. Furthermore, he said the new development was for the best of the stablecoin's sustenance.
"Excited to see $USDC launching on new chains and appreciative of all the work with @circle and @jerallaire over the years.
The world needs reliable infrastructure for stablecoins to help increase economic freedom globally!" Coinbase CEO said.
The new development from Coinbase seems welcomed by the crypto community. Already the crypto exchange is battling a lawsuit from the US regulator over issues of operating without registration.
To prevent the same scenario from happening with USDC, Coinbase is making efforts to make the operational and governance structure okay. Hence, they are moving the whole governance rights to Circle.