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Cryptocurrency News Articles

Coinbase Ramps Up USDC Holdings on Base Network

Mar 27, 2024 at 07:59 am

Coinbase will soon store more USDC on its Base network. The change will allow Coinbase to manage and secure customer funds with lower fees and faster settlement. Coinbase's shift could noticeably impact Base's overall USDC balance, but it will not significantly affect USDC's broader Ethereum distribution. This move follows the dissolution of the CENTRE consortium, which Coinbase was previously involved in governing.

Coinbase Ramps Up USDC Holdings on Base Network

Why Is Coinbase Bulking Up Its USDC Holdings on Base?

After a recent announcement from Coinbase's Vice President of Product, Max Branzburg, the crypto exchange has revealed plans to significantly increase its USDC holdings on its Base network. Branzburg stated, "Going forward, Coinbase is going to be storing more corporate and customer USDC balances on Base." This move is expected to enhance Coinbase's ability to manage and secure client funds with lower fees and faster settlement.

Where Does Coinbase Currently Store Its USDC?

Arkham Intelligence data shows that Coinbase currently holds a total of $220.7 million in USDC, but only 17% ($37.4 million) is stored on Base. The majority (70% or $155.1 million) resides on Ethereum. Coinbase also holds USDC on other chains, including Arbitrum ($17.2 million), Avalanche ($4.9 million), Optimism ($5.1 million), Polygon ($1.0 million), and BNB Chain ($38,557).

What Impact Will This Shift Have on Base's USDC Balance?

As of March 26, there was approximately $735.2 million in USDC natively on Base and an additional $73.5 million bridged from Ethereum. Coinbase's decision to transfer hundreds of millions of USDC to Base could significantly alter the chain's overall USDC balance. However, it's important to note that Coinbase's USDC holdings represent a small fraction of the stablecoin's total market cap of $32.3 billion, with $27.2 billion residing on Ethereum. Therefore, Coinbase's shift is unlikely to have a significant impact on USDC's broader Ethereum distribution.

Coinbase's Role in USDC Governance

In the past, Coinbase played a crucial role in governing USDC through the CENTRE consortium. However, CENTRE was dissolved in August 2023, and governance was transitioned to Circle. Coinbase now holds a stake in Circle and maintains a commercial partnership with the firm.

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Other articles published on Jan 10, 2025