Coinbase Invests In Circle; On Digital Assets Legislation In Congress This Fall

Coinbase invests in Circle

Coinbase announced after markets closed yesterday that it had acquired a stake in Circle, which issues the stablecoin USDC. In a post on the Coinbase blog co-authored by Coinbase CEO Brian Armstrong and Circle CEO Jeremy Allaire, the two said, “The nature of the investment means that Coinbase and Circle will now have even greater strategic and economic alignment on the future of the financial system. Coinbase is committed to the long term success of the stablecoin ecosystem and USDC, specifically.” Read more.

The Wall Street Journal notes that Coinbase and Circle co-founded USDC in 2018 which included a “revenue sharing agreement on the interest income earned from reserves backing the stablecoin.”

The Centre Consortium, which was a consortium used for a form of self-governance of USDC, will now be disbanded due to “growing regulatory clarity for stablecoins in the U.S. and around the world,” said the CEOs.

Circle’s USDC had been under pressure from old (Tether) and new competitors (PayPal) alike and the new partnership with Coinbase will include the launch of “USDC on six new chains in the coming months to help increase adoption, although the company declined to provide specifics,” according to Fortune. Read more.

shifting political sands

Blockchain Association’s Director of Policy, Ron Hammond, provided a robust tweet thread on X yesterday on the digital assets legislation roadmap ahead. Hammond sees a House floor vote in October/November for the stablecoin and digital assest market structure bills passed out of the House Financial Services Committee at the end of July.

But, there are plenty of pitfalls beforehand writes Hammond: “For either of these bills to get traction in a D-led Senate, the R-led House needs to deliver a strong number of Ds and Rs to support. Ds are the flank to watch, but don’t forget the more right leaning Rs. CBDCs (Central Bank Digital Currencies) are toxic in that group and some confuse stablecoins as CBDCs.”   Read more.

more tips:

Read blockchain tipsheet’s coverage of House Financial Service Reps. French Hill (R, AR), Warren Davidson (R, OH) and Mike Flood (R, NE) at the Flyover Fintech conference on August 3 and their discussion of next legislative steps for digital assets in Congress.

Capitol Hill may be hearing more about in the near future.

It’s the new app which allows X users (i.e. Twitter users) to sell “shares” of their online presence. In exchange, the buyers, using crypto, can receive digital experiences with the seller such as the ability to directly communicate with them.

One wonders if this could evolve into yet another way to raise campaign funds.

It’s much too early to say (there are privacy concerns, let alone there isn’t even a privacy policy, yet), but the app is already the third largest fee generator in decentralized finance (DeFi) according to DeFi Llama. And CoinDesk reports that digital wallets have “surged to more than 100,000 addresses since its Aug. 10 launch.” Read that one.

Keep in mind, is a “web app” meaning: you can only see it through a mobile web browser, specifically the iPhone’s Safari browser.

digital ID and China

China wants to roll out a digital ID system if recent proposals outlined by China Mobile are any indication. Politico says that that the state-owned telecom provider is looking at creating “a ‘Digital Identity System’ for all users of online virtual worlds, or metaverses.” According to Politico, the proposal also is looking to wrap other offline identity elements such as occupation and “natural characteristics.”  Read more.

Though there was no mention of the two working together in this article, pairing a digital ID with a Central Bank Digital Currency (such as China’s digital yuan), would appear to provide a complete roadmap to one’s online life.

podcast: Facebook’s stablecoin

In a Bankless podcast titled, “Why Facebook’s Stablecoin Failed,” former Facebook executive David Marcus discusses everything from his 2019 Congressional testimony supporting the Libra stablecoin to the friction between Silicon Valley, its technology and today’s banking system – especially as it relates to payment infrastructure. Marcus says, as a result, the “unbanked” suffer the most as high fee, check-cashing and money transfer businesses serve the underserved. Listen here.

ETF frustration

The approval of Bitcoin spot market Exchange-Traded Funds (ETFs) can’t come soon enough for some says cryptocurrency research group CoinShares. “Digital asset investment products saw outflows totalling US$55m, we believe this is in reaction to recent media highlighting that a decision by the US Securities & Exchange Commission in allowing a US spot-based ETF is not imminent,” says CoinShares James Butterfill. Read more.

In the big picture, $55 million doesn’t seem much compared to Bitcoin’s $500 billion (with a B) market cap. Crypto winter may be tiring institutional traders – and researchers.

see more tips

Digital Assets: JP Morgan Onyx team’s remit is to “blow it up”, to disrupt (August 18) – Ledger Insights

How AI, Blockchain technology are taking India’s insurance industry to next level – The Economic Times

Crypto rights are fundamental American rights – Blockworks