USD Coin (USDC) will be launching on six new blockchains following the expansion of the strategic partnership between Coinbase and Circle. American cryptocurrency exchange Coinbase has acquired a minority stake in Circle, the popular USDC stablecoin issuer. According to Coinbase, the move is a part of its effort to expand its support for stablecoin.
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Circle Takes Full Responsibility For USDC Issuance
Coinbase and Circle have agreed to dissolve their Centre Consortium partnerships, the jointly managed self-governance collaboration that brought about USDC. Consequently, Circle will assume total control of USDC issuance and governance.Still both entities will maintain their commercial relationship.
“The new structure will streamline the operations and governance, and enhance the direct accountability of Circle as the issuer, including holding all the smart contract keys, complying with regulations on governance of reserves and enabling USDC on new blockchains,” the jointly published blog post stated.
Regulatory Concerns Challenge Stablecoin Ecosystem
The expansion into new blockchains is expected between September and October. Once it is achieved, it will increase the total number of blockchains supporting USDC to 15. Markedly, this will help bring USDC to more businesses especially for those applications and developer communities that prefer USDC as the onchain dollar.
The decision to nullify the Consortium was tied to the United States raging regulatory challenges and a lack of clarity in the sector globally. Last year, Andrew Bragg, Australia Liberal senator proposed a bill to crack down on stablecoin as well as some other kinds of digital assets claiming that the parliament must drive law reform. The bill was dubbed Digital Assets (Market Regulation) Bill 2022.
U.S Federal Reserve Seek Control Over Stablecoin Issuance
In the U.S., authorities are still trying to figure out how to implement and adopt the crypto asset. Jerome Powell, the chairman of the Federal Reserve is pushing for the central bank to have a significant role in the issuance of stablecoins.
Speaking to the House Financial Services Committee in June, he opined that it would be quite appropriate for the U.S. central bank to have a robust federal role in what happens in the stablecoin ecosystem going forward. He believes that a lack of control over stablecoins leaves the government with a weak role and “allowing a lot of private money creation at the state level would be a mistake.”
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