Coinbase Global announced significant restructuring this week with plans to secure an equity stake in Circle. Additionally, the two companies, which jointly managed the Centre Consortium responsible for the stablecoin USD Coin (USDC), will dissolve this partnership.

The news comes as Coinbase reveals USDC’s expansion to six new blockchains.

Coinbase Rejig Circle Partnership

Citing regulatory clarity surrounding stablecoins, Coinbase noted in a blog post that it is increasing exposure in the sector with Circle investment,

“The nature of the investment means that Coinbase and Circle will now have even greater strategic and economic alignment on the future of the financial system.”

Coinbase stated that while USDC will continue to generate revenue for the companies, the Centre’s separate governance structure became redundant. This means revenue from the interest income on USDC reserves will continue to be a shared asset between Coinbase and Circle.

According to the statement,

“Centre will no longer exist as a stand-alone entity and Circle will remain as the issuer of USDC, bringing any Centre governance and operations responsibilities in-house.”

Circle is the issuer of the USDC stablecoin pegged to the US dollar, but the new structure will reportedly increase its accountability. The company states it “will take full control over USDC issuance and governance.”

Sponsored
Sponsored

Circle Expands Across Blockchains

In addition to these governance changes, USDC will also expand its blockchain footprint. USDC is set to launch on six more blockchains between September and October. This expansion would mean the digital dollar would be accessible across 15 different chains. Meanwhile, both companies have affirmed to maintain a commercial relationship.

Meanwhile, the Nasdaq-listed exchange assured its customers that there would be no changes to USDC on Coinbase. This means that the exchange will support USDC across its platforms with existing rules.

USDC is the second largest stablecoin by market cap, behind Tether, with around $26 billion at press time.

Interestingly, the news spurred discussions outside the immediate scope of the announcement.

Attorney John Deaton, who represents XRP holders in the ongoing Ripple SEC lawsuit, has thoughts on an alternate possibility. He wondered if Coinbase would have announced a stake in Ripple instead of Circle if there were no lawsuits.

He emphasized in a tweet that the ongoing litigation has hampered XRP and developments related to its ledger.