Coinbase Acquires Minority Stake in Payments Company Circle
Coinbase (COIN), a US-based cryptocurrency exchange, has acquired a minority stake in payments company Circle.
The collaboration comes as both entities take the significant step of canceling the Center Consortium partnership, which was instrumental in issuing USD Coin (USDC), currently ranked as the second largest stablecoin in the world.
Updated agreement
According to Fortune, this updated agreement was made on Monday, August 21, which comes in response to regulatory uncertainty and potential competition from stablecoins, including Tether and now PayPal’s new stablecoin, PYUSD.
USDC was originally launched in 2018 as a stablecoin pegged to the US dollar, a measure that would theoretically peg the asset’s price at $1. The idea was first created by Circle, and the company went on to build a consortium called Center to manage the stablecoin. Coinbase later joined this consortium as a distribution partner in preparation for the launch of USDC.
After the launch, the stablecoin reportedly grew significantly, resulting in significant profits for Coinbase and Circle. While these two entities previously had a revenue sharing agreement, which was disclosed in the financials from both companies, that would split profits based on the USDC mined by each company, and the amount held in each platform, the agreement The new will remain the same as the other equally shared interest income from any USDC outside the platform such as meta wallets. The amendment will remove the previous focus on the company that originally minted the USDC.
According to Jeremy Allaire, CEO of Circle, this would create a strong fit for long-term success between the two entities, though exact numbers about the investment were not announced.
Growth is imminent
Coinbase continues to expand its operations, as evidenced by another major announcement from the company a week ago. On August 14, the company also announced its official entry into Canada, which it stated came along with Interac Payments Bars, Partnerships, Funds Transfers, and Coinbase One.
Although the company ran into regulatory difficulties earlier this year, several headlines, including new partnerships and continued growth, show that it may take more than an SEC allegation to shake up one of the largest cryptocurrency exchanges. In the world.
