On August 21, Circle, the issuing company of the USDC stablecoin, released a statement about the coin's changes. This announcement essentially consists of two parts. The first part is about changes to the management structure of the stablecoin; the second one covers the increasing accessibility of USDC. Let's break it all down in order.
New USDC governance
USDC used to be managed jointly by Coinbase and Circle. However, due to regulatory difficulties, they carried it out through the “Centre Consortium".
Now, the management body is being abolished, and all issuance and security responsibilities fall into Circle’s hands. According to the statement, the reason behind this is the "growing regulatory clarity for stablecoins in the U.S. and around the world, the requirement of a separate governance body like the Centre is no longer needed".
It has also become known that "Coinbase is taking an equity stake in Circle". The amount of the investment is not disclosed. In addition, under the new agreement, "revenue will continue to be shared based on the amount of USDC held" on each of the platforms.
Furthermore, the statement has revealed USDC's plans to expand its presence. During September and October of this year, the stablecoin is set to be launched on six new networks. Currently, USDC is natively represented on the following blockchains: Algorand, Arbitrum, Avalanche, Ethereum, Flow, Hedera, Solana, Stellar, and TRON. Other networks are possible via bridges.
While there are no official announcements yet, it turns out that earlier Circle announced the soon-coming native support for Polkadot, Near, Optimism, and Cosmos. Moreover, we can expect USDC to appear on the Base network, which is an L2 solution for Ethereum launched by Coinbase.
Current USDC position
These changes and plans for expanding the USDC come amid issues the stablecoin is experiencing right now. Despite holding the second position after USDT, USDC’s capitalisation has fallen from $44 billion to $26 billion since the beginning of March.
Remember that in March USDC temporarily lost its peg to the US dollar due to the Silicon Valley bank’s collapse. The bank had been part of the stablecoin’s security.
On top of that, a potentially strong competitor from Paypal, PYUSD, has recently emerged. Although PYUSD has flaws and relatively small capitalisation (according to Etherscan, now it stands at $40 million), its listing has already been announced by Kraken and Crypto.com exchanges.
You might also like: