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USD Coin (USDC) will be supported by six new blockchains in the coming months, bringing the stablecoin’s multi-chain access up to fifteen. Further, Coinbase, one of the founding members of the self-governance consortium for USDC, will buy a minority equity stake in the coin’s issuer, Circle.
USDC, the second-largest stablecoin in the world, will be launched on six new blockchains between September and October, Coinbase announced on Monday.
“USDC will be launching on 6 new blockchains between September and October, bringing the multi-chain access of USDC up to 15 to continue accelerating USDC’s momentum with developers around the world.”– Coinbase wrote in the blog post.
The move comes as Coinbase acquires a minority stake in USDC issuer Circle Internet Financial, reinforcing the strategic partnership between the two companies. At the same time, the companies are dissolving their Centre Consortium alliance that had launched the USDC in 2018, citing growing regulatory clarity for stablecoins around the world.
As a result, the breakup of the Centre will significantly modify the USDC’s governance process. Rather than entrusting the stablecoin’s governance to a separate body, all management and operational responsibilities will now be handled by Circle.
“This change aims to simplify operations, make Circle directly accountable as the issuer, and enable USDC on new blockchains while complying with reserve governance regulations.”– Coinbase added.
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The latest developments come on the back of a challenging year for USDC. Although it remains the second-biggest stablecoin by valuation, USDC has lost its market share to Tether’s USDT.
From the start of 2023 to July 31, USDT’s dominance increased from 49.48% to 68.87%, while USDC’s market share declined from 33.27% to 21.91%. Binance USD (BUSD) saw its market share decline rapidly from 12.36% to 3.13% during the period due to US regulators’ decision to halt the issuance of more BUSD coins.
In the meantime, payments giant PayPal forayed into the stablecoin market, launching its asset backed by dollar deposits and Treasury bills. The stablecoin, dubbed PayPal USD (PYUSD), is issued by Paxos, the same blockchain infrastructure firm that used to issue BUSD.
The global stablecoin market is expected to witness a substantial growth rate of 2,140% over the following 5 years and hit $2.8 trillion in valuation.
Do you think Coinbase’s investment and new governance process will help USDC regain its market share? Let us know in the comments below.