Breaking the monopoly of Circle and Coinbase, USDC is open to applications for issuance and exchange institutions
There is no smoke in the stablecoin war.
Following the doubling of the market value of the stablecoin PAX, Circle and Coinbase behind USDC are actively developing their stablecoin network to promote the adoption rate of USDC.
On Thursday, Circle and Coinbase shared ajoint press releaseUsers of the cryptocurrency will soon be able to issue and redeem USDC on multiple platforms in an effort to expand “industry participation” for its stablecoin, the announcement said. This move will allow other financial entities to join CENTER, a consortium formed by Circle and Coinbase to maintain and support the USDC network.
In September last year, the cryptocurrency financial company Circle launched its first stablecoin USDC, which is currently the second-ranked stablecoin and the top 25 encrypted assets in terms of market value. In January this year, the market value exceeded 300 million US dollars.
In October, cryptocurrency exchange Coinbase joined Circle and became a co-founding member of CENTER in October. This means that while dozens of cryptocurrency exchanges can list USDC, so far, USDC can only be exchanged for physical dollars on the two founding platforms.
But that exclusivity will end as CENTER opens up institutional applications.
To become an issuer, members must agree to "CENTER's operating rules and issuer settlement and liability framework," Circle said. In the meantime, members need to meet the following criteria:
1. License: a license that supports digital currency services, such as banks, trust banks, currency exchange agencies or other institutions authorized to provide financial services in the jurisdiction in which they operate;
2. Regulatory compliance: Comply with the regulatory requirements of the member's region, as well as US anti-money laundering (AML) and counter-terrorist financing (CTF) rules and international principles (such as the rules and international principles promulgated by the Financial Action Task Force or FATF). In addition, members must meet periodic third-party audits to demonstrate compliance with these requirements;
3. Technology and business: meet the technical and business requirements of CENTER;
4. Custody of statutory reserves: accepted by CENTER-approved statutory reserve financial institution partners and in line with CENTER's investment policies;
5. Accounting: Accepted by certified financial accountants approved by CENTER, and able to meet the review and certification requirements of reserve accounting.
In general, member institutions need to be compliant, licensed, have custody, and be technologically advanced.
It's also worth noting that issuers will have a degree of autonomy and will be able to determine their own fee structure for exchanging USDC. Insiders said bringing in a new issuer could solve some of the headaches traders face.
In addition to issuance and redemption rights, CENTER also hopes that member institutions can "jointly contribute to the development of technical standards and open source software" to power USDC. At a media dinner in New York on Wednesday, Circle CEO Jeremy Allaire hinted that USDC would move to other blockchains, such as EOS, in the future.
CENTER also hinted at plans to build a Facebook-style GlobalCoin composed of multiple currencies; noting that "the next step is to envision a new global digital currency" or a basket of tokens backed by various stablecoins. It also noted that it would use bitcoin as a "reserve currency asset."
