Coinbase has invested in Circle, the issuer of the USDC stablecoin, and the two companies have decided to shut down the Centre Consortium, which was created by Circle in 2018 with the purpose of providing guidance in regards to stablecoins' policy.
Coinbase, a prominent cryptocurrency exchange, has announced an equity stake in Circle, the issuer of the USDC stablecoin. With this move, they are signaling a closer partnership and have declared that the Centre Consortium, which is a private organization that governs USDC, will be disbanded due to the "regulatory clarity" obtained. Coinbase has also stated that this indicates their commitment to the success of the stablecoin market and USDC, in particular.
Back in March, USDC saw a significant fall below its peg due to the collapse of Silicon Valley Bank, a major lender to the tech industry. At the time, Circle had an outstanding balance of $3.3 billion with this bank. Following U.S. regulators assuming control of SVB's deposits, customers were able to regain access to their funds, and the coin was able to establish its $1 peg.
Circle's USDC stablecoin was launched in 2018 and is seen as an integral player in the $124.1 billion industry. Despite a proposed SPAC merger that was shelved in December, the company has kept a firm presence in the market.
USDC is currently one of the leading stablecoins with $26 billion in tokens circulating, but its market share is dwarfed by the market leader - Tether - with a value of $82.8 billion and a market share of nearly 67%. In 2018, the Centre Consortium was founded by Circle to address the policy issues around stablecoins, whose aim is to provide traders with an alternative to the banking system and fiat currencies. Following the failure of a major stablecoin, terraUSD, due to its complex algorithm, regulators are now viewing stablecoins like unregulated money market funds and are proposing to put them under the same laws that banks and payment companies are governed by. Circle have signed up Coinbase as an investor and will be shutting down the Centre Consortium to kick-start their plans to launch USDC on six new blockchains in September and October, with the aim of bringing the total number of blockchains USDC is available on to fifteen.
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