Previously, Coinbase only assumed a minority role as a distributor and promoter of the Circles USDC project. Buying a stake in Circle means Coinbase is taking a more hands-on approach to the project. The size of Coinbase’s stake in Circle has, however, not been revealed.

According to CoinGecko, the market capitalization of Circle’s USD Coin (USDC) increased dramatically over the course of the last five years, rising from just $500 million to about $26 billion.

The stablecoin was developed through the Centre Consortium, which provides governance over the token. It is competing for market supremacy with Tether’s USDT and, the more recently launched PayPal stablecoin.

Initially, Coinbase played a limited role as the project’s distributor and advocate at the time, with Circle providing the majority of the labour and capital required for the project.

In accordance with earlier accords, Coinbase and Circle agreed to split revenue based on USDC ownership and each company’s statistics for coin minting and distribution.

Coinbase has made the decision to step up and adopt a more active strategy. The two have reached a new agreement which will place more emphasis on holdings, particularly those on third-party DeFi wallets, and less on the business operations of the partners.

The news of the new partnership broke soon after Circle declared that the Centre Consortium would be disbanded. According to Circle CEO Jeremy Allaire, the Center, which has been a key component of Circle’s initiative ever since the beginning of USDC, is no longer required. The consortium’s original purpose was to facilitate governance sharing among several companies.

However, the anticipated collaborations with other businesses never happened, leaving Centre as nothing more than a conduit for negotiations between Coinbase and Circle. The two companies concurred to disband the consortium because they were already carrying out all tasks required for maintaining and promoting USDC.

Although Allaire said that Coinbase’s stake was a modest, minority stake and that Circle will still be largely in control of the project, the extent of Coinbase’s new holding in Circle still remains a secret.

Following the formalities, Circle intends to keep enhancing USDC’s capabilities in an effort to generate additional money. Circle also intends to introduce USDC on six new blockchains in the near future, albeit they have withheld the names of those blockchains for the time being.

Circle has already introduced a Euro-backed stablecoin on Avalanche and is working on cross-chain functionality and programmable wallets to make USDC more appealing to developers.

The post Coinbase buys a stake in USDC stablecoin issuer Circle appeared first on CoinJournal.

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