Coinbase buys stake in Circle Internet Financial

The cryptocurrency exchange Coinbase bought a minority stake in Circle Internet Financial as part of expanding support for stablecoins.

Under the agreement, the Center consortium, run by both companies, will be dissolved. It was responsible for issuing the stablecoin USDC, with Circle now solely responsible for its issuance.

In September–October, the stablecoin will launch on six new blockchains. As a result, its total number will reach 15. The company did not name the specific protocols, but earlier reports indicated plans to expand to Polkadot, Near, Optimism and Cosmos.

“The nature of the investment means that Coinbase and Circle will now have an even greater strategic and economic alignment with regard to the future financial system,” said Coinbase CEO Brian Armstrong and Circle CEO Jeremy Allaire.

Both companies will earn an equal percentage of the income from the USDC reserves.

Earlier, said of a $1 billion safety cushion that the firm plans to use to bolster its competitive advantages. Since the start of the year, USDC’s market capitalization has fallen from $44.5 billion to $26.2 billion.

In Circle CEO’s view, competition in the market will grow as more players enter. The emergence of PYUSD from PayPal is only the beginning, the issuer’s chief said.

In May, Coinbase launched an international cryptocurrency futures exchange — Coinbase International Exchange. On August 18, trading on the platform reached a record $287 million.