According to Coinbase’s blog post, the issuer of the second-biggest stablecoin USDC, Centre Consortium, is now dissolved after the crypto exchange bought a minority stake in Circle. In the blog post, Coinbase CEO Brian Armstrong and Circle CEO Jeremy Allaire said Circle would be USDC’s issuer going forward.
The two leaders added that the two companies would split revenue from USDC reserves equally.
The Centre Consortium was founded in 2018 by Circle and Coinbase. During its launch, the consortium announced that it was looking forward to introducing more issuers of its USDC stablecoin. However, that never materialized. As of this writing, Circle is expected to be the only issuer.
USDC Set to Expand to More Blockchains
Meanwhile, Allaire and Armstrong have revealed that by the end of October, USDC will be running on about six new networks. If this happens, the stablecoin will be available on fifteen blockchains.
USDC comes second in terms of market capitalization, only behind Tether’s USDT. Data from CoinGecko shows USDC has a market valuation of $25.9 billion, while its biggest rival, USDT, has a market cap of $82.8 billion.
So what are stablecoins? They are crypto assets usually collateralized with fiat reserves, mostly United States Dollars. This means any stablecoin holder can redeem their tokens for dollars at any given time.
What Assets Back USDC?
It is worth mentioning that reserves backing USDC are not entirely cash. The stablecoin is also backed by Treasury Bills. These assets have witnessed massive yields in recent months as a result of inflation.
At the start of August, Coinbase announced its quarter two earnings, revealing it had recorded over $650 million in revenue during that period. At the time, analysts said the crypto exchange had discovered new ways of making money amid a bear market, in which the trading activity tends to be minimal. Among the new Coinbase revenue streams is interest earned from Treasury Bills backing USDC. The analysts note that the interest gained accounted for a significant portion of the total revenue.
As of this writing, it remains unclear whether Circle absorbed the employees that worked at Centre Consortium.
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