A press release published on September 20 revealed that Wormhole has integrated Circle’s Cross-Chain Transfer Protocol (CCTP), enabling the transfer of USD Coin (USDC) between Ethereum, Avalanche, Arbitrum, and Optimism through Wormhole-based bridges.
End-users can access Wormhole’s new feature via the Portal bridge, and developers can integrate it into their apps using Wormhole Connect.
The Wormhole team highlighted that having multiple versions of USDC on different chains can result in fragmented liquidity and user confusion, stating that “this can lead to a poor user experience and hinder the growth of these new chains.” The CCTP integration was designed to solve this problem by creating a “natively cross-chain USDC” that can be burned and minted on any chain connected to Wormhole.
The initial release of USDC was limited to the Ethereum blockchain, which meant that users who wanted to transfer USDC to other blockchains had to go through a complicated process of locking up their USDC on Ethereum and minting a separate, derivative version of the token on the other chain. Furthermore, multiple bridging protocols with various derivative versions of USDC could sometimes lead to confusion and difficulty for end-users.
Circle’s journey in expanding the reach of USDC has been extensive, with the stablecoin now available on 14 different chains. This expansion began in 2021 with the launch of USDC on Stellar and has continued to include other chains.
While it’s possible to move USDC from one network to another, there are still some limitations. To accomplish this, users need to deposit their USDC into a Circle partner’s account on the source chain and then withdraw it from the same partner’s account on the destination chain.
However , due to the complexity of transferring native USDC between networks, many users have chosen to use bridged versions of the coin instead.
In April 2022, Circle introduced CCTP, a new solution that aims to streamline the transfer of USDC between chains. CCTP uses smart contracts and an API to allow users to directly burn their USDC on one chain and have it re-minted on another chain, without the need to deposit it into a Circle partner account first. Initially, CCTP was only available for USDC transfers between Ethereum and Avalanche, or vice versa. However, Circle has since expanded the protocol’s capabilities to include Optimism and Arbitrum. The company plans to continue adding additional networks in 2023.
However, In a September 20 announcement, Wormhole announced that it has integrated CCTP into its interface, making it possible for users to transfer native USDC between supported networks without needing to use a Circle partner account. This integration makes it even easier for Wormhole users to move USDC between Ethereum, Optimism, Avalanche, and Arbitrum.
Wormhole is not the only blockchain bridge that has implemented CCTP or plans to do so in the future. According to Circle’s April 26 announcement, another bridge called Wanchan has already implemented CCTP, and four other bridges – Celer, Hyperlane, LayerZero, and LI.FI – has announced plans to do the same.