Circle and Coinbase announced a series of updates to USD Coin (USDC), with a notable highlight being Coinbase’s new equity stake in Circle. This significant partnership development comes at a challenging time for the stablecoin, and it signifies a strengthened alignment between the two companies.

The joint announcement also detailed the expansion of USDC to six new blockchains between September and October, increasing the total number of chains supporting USDC to 15. This move is aimed at accommodating a growing number of businesses, applications, and developer communities.

Coinbase’s decision to buy a stake in Circle follows its Q2 2023 revenue of $151 million in interest from USDC and comes against the backdrop of a turbulent period for the stablecoin. In July 2022, USDC boasted a market cap of $55 billion, but by March 2023, it had fallen to $40 billion. The decline continued after USDC depegged from the dollar following the Silicon Valley Bank crash in March, and its market cap has since fallen to $25 billion as of press time, according to data from DefiLlama.

The two companies will continue to generate revenue from USDC reserves’ interest income, sharing it based on the amount of USDC held on each platform, and will equally share interest income from the broader distribution and usage of USDC.

In addition to the expansion and investment, Circle and Coinbase revealed a change in governance, dissolving the Centre Consortium, the self-governance body for USDC. In light of growing regulatory clarity for stablecoins in the U.S. and across the globe, Circle will assume full control over USDC issuance and governance, a step anticipated to streamline operations.

Jeremy Allaire, CEO of Circle, elaborated on the announcement on X (formerly Twitter), stating: “Two of the largest and most important global (and US-based), well-regulated players are going to drive hard to continue to make USDC the most widely used digital dollar in the world.”