Image Credits: CryptoAvanza
Coinbase, a well-known platform for trading cryptocurrencies, has taken a step to become a minority owner of Circle Internet Financial. At the same time, they’ve decided to end their partnership with the Centre Consortium, the group that introduced USD Coin (USDC), which is one of the world’s most widely used stablecoins.
In this important change of direction, Circle will now be responsible for creating and managing USDC internally. Additionally, USDC will now be compatible with six more blockchains, bringing the total number of supported blockchains to 15.
The exact details about how much Circle Coinbase now owns were not shared publicly, and the transaction didn’t involve a direct exchange of money, according to a source that preferred to remain anonymous.
The landscape of stablecoins tied to the value of the US dollar has gone through some significant transformations recently. PayPal, a major player in the financial technology sector, has introduced its version of a dollar-pegged stablecoin called PYUSD, developed with the help of Paxos. This move poses a challenge to the popularity of other stablecoins like Tether’s USDT and the previously mentioned USDC.
Despite this competition, Coinbase doesn’t seem too concerned. Phil McDonnell, who holds the position of Senior Director of Product Management at Coinbase, pointed out that the growth of cryptocurrency is still in its early stages compared to the traditional financial systems we’re used to.
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Although the rules and regulations surrounding stablecoins are still developing, there have been some notable steps forward. For instance, the Clarity for Payment Stablecoins Act of 2023 has received support from both sides of the political spectrum within a crucial committee of the U.S. House of Representatives. This marks a significant move in the direction of clearer regulations for stablecoins. On another note, Circle has obtained a license as a Major Payment Institution in Singapore, which indicates progress in creating a solid regulatory framework.
The decision to dissolve the Centre Consortium and handle the issuance of USDC independently aligns with the growing maturity of the stablecoin landscape and the increasing clarity in terms of regulations. With big players like PayPal entering the scene and clearer rules coming into play, Dante Disparte, Circle’s Chief Strategy Officer and Head of Global Policy, believes that the old system of self-regulation is becoming less relevant.
This shift not only mirrors the changing nature of stablecoins but also illustrates the way the cryptocurrency industry is evolving as key players adjust their strategies.
