USDC stablecoin's declining market appears to be a point of concern for both Coinbase and Circle, founders of the digital currency.
to shore up USDC by taking an equity stake in Circle shows just how important interest income from the stablecoin is to the company's bottom line.
The announcement came amid declining market share for USDC and fresh competition from new competitors such as payments giant“Coinbase providing Circle with some measure of support makes sense,” said Mark Palmer, a digital assets and fintech research analyst at"Interest income from USDC represented almost 23% of the company’s net revenue in the second quarter, and USDC’s market cap has only continued to decline," he added.
While the size of Coinbase’s stake in Circle has not been disclosed, the new setup also replaces the Centre Consortium. The group, which was founded by Circle and Coinbase in 2018, was meant to serve as a foundation for a number of firms contributing to the issuance of USDC.
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