Two of the largest cryptocurrency companies, Coinbase and Circle, are joining forces to establish more ground rules in the quickly evolving asset class.

The start-ups announced a joint-venture known as the "CENTRE Consortium" on Tuesday, which they say aims at speeding up adoption of cryptocurrencies backed by actual government currencies like the U.S. dollar.

"Coinbase and Circle share a common vision of an open global financial system built on crypto rails and blockchain infrastructure, and realizing this vision requires industry leaders to collaborate to build interoperable protocols and standards," Circle co-founders Jeremy Allaire and Sean Neville said in a news release Tuesday.

Circle launched its own U.S. dollar version of what's known as a "stablecoin" in May. The fintech company, valued at $3 billion in its most recent funding round, has made a series of deals and announcements in a long-term bet that despite bitcoin's price slump, the crypto economy is here to stay.

The "USD Coin" was one of those bets, and as of Tuesday it will trade on Coinbase's popular cryptocurrency exchange. This is the first time Coinbase has supported a stablecoin, which it said is "fundamentally different" from other cryptocurrencies.

Bitcoin's price has fluctuated wildly since its rise to nearly $20,000 last year, making it almost impossible to use as a viable payment alternative. A stablecoin like Circle's USD Coin, in comparison, is meant to represent a single U.S. dollar. It is a 1:1 representation of the greenback, just built on the ethereum blockchain. Each USD Coin is collateralized by a corresponding U.S. dollar, held in accounts subject to regular public reporting of reserves, Circle said.

"We see USDC as a major step towards a more open financial system. The advantage of a blockchain-based digital dollar – like USDC – is that it is easier to program, send, use in apps, and store locally than traditional US dollars," Coinbase, reportedly valued at $8 billion, said in a blog post.

Other Stablecoins have proved to be less than stable. Earlier in October, the price of Tether, which is also meant to be pegged to the U.S. dollar, plummeted below 90 cents after reports that the Hong Kong-based cryptocurrency exchange was insolvent. Critics of Tether have called into question whether that cryptocurrency is truly backed by the equivalent amount of U.S. dollars.

Circle CEO Jeremy Allaire has made multiple long-term bets on the future of cryptocurrency. But he's not certain trades or investments in the future crypto economy will be done in bitcoin. He recently told CNBC that investors will still rely on government-backed money — it just needs to be able to operate on the same blockchain technology.

Circle's USD Coin is not meant to replace the U.S. dollar, Allaire explained — it's a way to take an existing dollar and make it compatible with the cryptocurrency infrastructure, which advocates say is better and faster than existing payment rails.

"If people can exchange value over the internet without a toll extracted for payments it's pretty dramatic," Allaire said at the October Security Token Academy conference in Manhattan. "It'll make the web look like a cute experiment comparatively speaking in 10 to 15 years."

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