- Coinbase invests in Circle, highlighting belief in stablecoins.
- USDC bounces back from its March plunge, signaling resilience.
- Circle to expand USDC across six additional blockchains, eyeing global developer attention.
In a bold move that's turning heads, cryptocurrency behemoth Coinbase has decided to invest in Circle, the company behind the popular USDC stablecoin. This newfound bond is more than just financial. They're also winding down the Centre Consortium, previously responsible for governing USDC. Their reason? A clearer understanding of how stablecoins fit within current regulations.
Coinbase's commitment to the future of finances is unwavering, and by aligning themselves with Circle, they're sending a clear message. They genuinely believe in the role stablecoins play in the ever-evolving world of cryptocurrency. Now, if you flashback to March, there was a bit of a hiccup. USDC's value took a plunge, all thanks to the unfortunate collapse of the Silicon Valley Bank, a key player in the tech finance realm. Circle, heavily invested in SVB, faced a daunting task as $3.3 billion of their cash was with this bank.
But, like a phoenix rising, USDC soared back to its $1 peg. This resurgence was thanks to quick action by U.S. regulators who jumped in, secured the bank's deposits, and ensured customers could still get to their money. Fast-forward a bit, and Circle's been a pioneer in the stablecoin world since 2018. Their decision to venture into this market, now valued at a whopping $124.1 billion, was indeed a masterstroke. For context, USDC alone represents 21% of the total stablecoin market, a notable achievement.
The Centre Consortium, formed in 2018, had an aim: to guide policies around stablecoins. These digital assets let traders swap in and out of crypto without the hassle of dealing with traditional money or banks. But the landscape's changing. Ever since terraUSD's unforeseen collapse, regulators have been watching stablecoins more closely. Some even say they're like those unpredictable money market funds and should be governed similarly.
Lastly, Circle's on the move. They're not just cozying up with Coinbase. They're also planning to launch USDC on six more blockchains soon. While they're keeping the names of these blockchains hush-hush, what's clear is their intention to bolster USDC's presence and make it a go-to choice for developers globally.
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