Circle and Coinbase said Circle would take USDC governance in-house

Circle and Coinbase announced on August 21, 2023 that Circle would bring the issuance and governance of USDC fully in-house, ending the need for Centre Consortium as a stand-alone governance organization. Coinbase would take an equity stake in Circle, while the companies would retain a commercial relationship tied to income generated by the reserves backing USDC.

The restructuring mattered because USDC was a major dollar-linked instrument used across exchanges, wallets and decentralized-finance applications. Control of its issuance, smart-contract administration and reserve governance was therefore important market infrastructure, even though USDC tokens moved on public blockchains. The announcement concentrated those responsibilities at Circle while giving Coinbase a direct ownership interest in the issuer.

Centre’s role moved to Circle

Circle and Coinbase had jointly launched USDC in 2018 through Centre, an organization intended to establish technical and governance standards for the stablecoin. Their August 21 statement said a separate body was no longer necessary because of what the companies described as increasing regulatory clarity in the United States and other jurisdictions.

Under the announced structure, Circle would remain the issuer and absorb Centre’s governance and operational duties. The companies specifically said Circle would hold all USDC smart-contract keys, oversee compliance involving reserve governance and manage deployment on additional blockchains. That was a consolidation of accountable control, not a conversion of USDC into a decentralized or permissionless monetary system.

The regulatory premise was also a company position rather than a legal determination. No comprehensive federal payment-stablecoin statute had taken effect in the United States on August 21, 2023. The announcement did not identify a regulator that had approved the restructuring, nor did it establish that USDC had received a uniform legal classification across every market where it circulated.

Ownership and reserve economics

Coinbase and Circle did not disclose the size, valuation or transaction mechanics of Coinbase’s equity stake on August 21. Contemporaneous reporting therefore supported only the narrower conclusion that Coinbase was obtaining an ownership interest in Circle; it did not support calculating the investment’s value from information available that date.

The companies were more specific about their continuing economics. Reserve interest income would still be allocated according to the amount of USDC held on their respective platforms. They also said income arising from USDC’s broader distribution and usage would be shared equally. That arrangement aligned Coinbase with USDC circulation beyond balances held directly on its exchange, while leaving Circle responsible for issuance and governance.

Six additional blockchain launches were planned

The joint announcement also said native USDC would launch on six additional blockchains between September and October 2023, increasing supported networks to 15. The six networks were not named on August 21, so attributing a particular chain to the plan would have exceeded the contemporaneous record.

The expansion was prospective. It did not mean all six deployments were operational on August 21, and it supplied no transaction-volume, liquidity or adoption forecast. Supporting more networks could broaden developer access, but it could also distribute liquidity across separate technical environments and increase the operational scope Circle was assuming.

Later filing context

Coinbase’s annual report filed in 2024 later disclosed that an August 18, 2023 agreement exchanged Coinbase’s 50% Centre interest for 3.5% of Circle’s fully diluted equity, initially valued by Coinbase at $51.1 million. Those details clarify the transaction but were not disclosed in the August 21 announcement and should not be treated as information available to the event-day audience.