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In a bid to cement its place as a stablecoin market leader, Circle has decided to introduce USDC to five new blockchains.
Circle has announced that its USDC stablecoin will now be available on five new blockchains. The second largest issuer of stablecoins, Circle intends to solidify its market position by providing access across several blockchains. By early next year, the USDC stablecoin will also be available on Arbitrum One, Optimism, NEAR, Polkadot, and Cosmos.
Stablecoins bridge the gap between the crypto space and traditional finance for trading and transactions. The competition among stablecoins, crypto pegged to a different underlying asset like the dollar or gold, has been heating up since the Terra collapse. However, USDC remains the second-largest stablecoin, and is widely accepted on Decentralized Finance (DeFi) platforms.
Circle intends to strengthen the USDC by ensuring its availability across more networks. Circle’s vice president of products, Jao Reginatto, said:
“Extending multi-chain support for USDC opens the door for institutions, exchanges, developers and more to innovate and have easier access to a trusted and stable digital dollar.”
Circle USDC Expanding to New Blockchains Follows Similar Tether Move
Before now, the USDC was present on the Ethereum, Algorand, Avalanche, Flow, Polygon, Hedera, Stellar, Solana, and Tron blockchains. The upcoming expansion would allow users to transact USDC on 5 more chains, increasing the total to 14. Similarly, the website of USDC’s main rival, Tether, suggests that the USDT stablecoin will soon be available on Polygon, despite its presence on 13 chains.
Circle also announced a tool called Cross-Chain Transfer Protocol to enable USDC transactions between different blockchains. The transfer protocol will operate on a mint-and-burn mechanism powered by bridging contracts.
When a user sends USDC from one chain to another, the Protocol will burn the amount transferred on the sender’s chain and mint the same amount on the destination chain. Circle’s new tool will initially be available on the Avalanche and Ethereum chains before supported USDC chains.
Cosmos Indigenous USDC to Replace Terra’s UST Stablecoin
In May, the Terra stablecoin collapsed and left the Cosmos ecosystem without a stablecoin. Reportedly, Circle will launch its USDC stablecoin on Cosmos by early next year. Before then, the issuer plans to start circulating USDC on the Arbitrum One, Optimism, NEAR, and Polkadot chains by the end of 2022.
Previously, the Cosmos DeFi ecosystem relied on the Terra stablecoin and its underlying algorithm to develop its on-chain borrowing, lending, and exchange markets. After Terra crashed, various stablecoins assumed the role of the UST. However, the alternative stablecoins could not provide users security as a natively issued stablecoin would. From early next year, Circle will start minting USDC directly to the Cosmos blockchain.