Coinbase left control from USDC stablecoin ahead of new structure plans
Circle & Coinbase decided to follow a new structure to run the USDC stablecoin business globally.
USDC is the top second-ranked stablecoin in the crypto sector. This stablecoin was founded by Jeremy Allaire & Sean Neville in Oct 2013 with the vision to remain always compliant with the financial rules, and to maintain a high level of confidence among crypto Investors. In 2018, Coinbase exchange jumped into a partnership with Circle officially.
On 22 Aug 2023, the Coinbase exchange announced that USDC stablecoin will be launched on 6 new crypto networks ahead of the new plans to grow the USDC ecosystem.
As per the announcement, Coinbase left its control of the USDC stablecoin financial activities and acquired a small stack in Circle.
In short, under the new structure of the partnership, Coinbase will not be able to interfere in the USDC financial activities or we can say that Circle will manage all the works with a big responsibility.
Circle CEO Jeremy Allaire shared his point of view on this new strategy partnership structure and said that USDC was launched 5 years back and at the time there were no rules for such business but now the situation has changed, so it was necessary to comply with rules & grow more fastly.
It is worth it to note that at the beginning of this year, the situation for the crypto companies was very bad in the US because the United States Securities Exchange Commission (SEC) was attacking rapidly against crypto companies with traditional securities Acts.
At the time, Circle’s CEO said that Circle followed all the rules & regulations and also secured all necessary licences to operate the Stablecoin business in the US jurisdiction but still faced huge regulatory pressure.
In Q1, Some big crypto-friendly banks went bankrupt. Circle was also holding some funds at SVB, which went bankrupt. The whole situation created very high sell pressure and faced a 13% downfall from the pegged $1 value.
Later the Circle team clarified all the matters to bring confidence among the USDC stablecoin users.
Read also: Blockchain Capital founder lost $6.5M crypto assets: Sim swap attack
