Circle, the issuer of the USDC stablecoin, has announced at the Coindesk Consensus 2023 event that it is creating a new bridge for the transfer of the stablecoin across several chains. USDC has been the second most used stablecoin in recent times after USDT and has maintained a market capitalization of over $30 billion throughout Q1 2023.
According to the company, the product, also known as Cross-Chain Transfer Protocol (CCTP), will help enhance the liquidity experience of USDC across the industry by making it faster, safer, and cheaper to transfer compared to the current bridges in DeFi.
One of the challenges mentioned by the company was that the current method of transferring USDC on Ethereum, Avalanche, and other chains where the stablecoin is issued is fragmented, leading to a complex and expensive mode of transfer for users.
Making USDC a natively multichain stablecoin
Speaking about the development at the event, Joao Reginatto, VP of Product and Product Lead for USDC at Circle, said that CCTP will allow developers to create a simple user experience in the industry. “This milestone makes USDC a natively multi-chain digital dollar,” he added.
CCTP will first be deployed for USDC transfers on the Ethereum and Avalanche blockchains, with more blockchains set to be integrated into H2 of 2023. Deploying CCTP involves a process where USDC is destroyed on the source chain while being recreated on the destination chain.
After maintaining a top spot in Q1 2023, the depegging of the USDC caused by the collapse of Silicon Valley gave rise to a huge panic in the industry. Circle announced that it had a deposit of $3.3 billion at the bank and was unable to withdraw it. However, days later, USDC, which fell to $0.88, rose back to $1.