Circle, the issuer of the USDC stablecoin, has launched a protocol for cross-chain transfers and interoperability.
On April 26, stablecoin issuer Circle announced that its Cross-Chain Transfer Protocol (CCTP) was available on the mainnet. Additionally, the system enables the permissionless transfer of USDC natively across supported blockchains.
According to the company blog post, CCTP gives USDC the unique ability to be “teleported” across chains. This means that the stablecoin is “effectively destroyed on the source chain and recreated 1:1 on the destination chain.”
Furthermore, its U.S. dollar reserves remain intact, said Circle Product Vice President Joao Reginatto.
“CCTP is a permissionless protocol built for developers, allowing them to benefit from this phenomenal transport primitive.”
Circle Goes Cross-Chain
Developers will be able to build applications that support different native versions of the stablecoin. According to the announcement, USDC is available on eight different networks. These are EthereumAvalancheAlgorandStellar, Flow, and Hedera.
Furthermore, a number of crypto infrastructure providers have already integrated CCTP. These include Celer, Hyperlane, LayerZero, LI.FI, MetaMask, Multichain, Rarimo, Router, Socket, Wanchain, and Wormhole.
The system brings Circle another step closer to an “open dollar developer platform that serves as a foundation for moving money on the internet,” said Reginatto before adding:
“CCTP is the most ambitious piece of neutral market infrastructure that Circle has built since introducing USDC in 2018.”
USDC is the second largest stablecoin behind market leader (USDT). However, unlike its rival that has expanded supplies this year, USDC in circulation has been shrinking.
According to Circle, the current supply of USDC is $31 billion. Furthermore, it has declined by 30% since the beginning of the year and 45% since its all-time high.
Additionally, this has resulted in a USDC market share decline to 23.5%, with Tether commanding 62% of the stablecoin market.
CEO Allaire Warns of De-Dollarization
Circle CEO Jeremy Allaire has warned about the increased trend of de-dollarization. Moreover, more and more countries, especially in Asia and Latin America, are ditching the dollar
Speaking at a crypto conference this week, Allaire said, “We have a very active de-dollarization taking place.” He added:
“You’re having very significant reactions to the U.S., risks in the U.S. banking system, risks with the U.S. government itself,”
Allaire urged the government to accelerate the regulation of stablecoins and issue a digital dollar CBDC. He said that failure to do so would be a “giant missed opportunity” for the country.
