USDC stablecoin issuer Circle has launched a protocol for cross-chain transfers and interoperability.
On April 26, the stablecoin issuer circuit announced that the Cross-Chain Transfer Protocol (CCTP) is available on the mainnet. Additionally, the system enables permissionless transfer of USDC locally across supported blockchains.
According to the company’s blog, CCTP gives USDC the unique ability to “instant transfer” across chains. This means that the stablecoin is “virtually destroyed on the source chain and recreated 1:1 on the destination chain.”
Moreover, its US dollar reserves remain the same, said Vice President of Circle Products Joao Reginato.
“CCTP is an unlicensed protocol that was created for developers, allowing them to take advantage of this massive transfer primitive.”
A circle goes through a string
Developers will be able to create apps that support different native versions of the stablecoin. According to the announcement, USDC is available on eight different networks. These are Ethereum, Solana, Avalanche, TRON, Algorand, Stellar, Flow, and Hedera.
Moreover, a number of encryption 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 developer dollar platform that serves as the foundation for moving money on the Internet,” Reginato said, before adding:
“CCTP is the most ambitious piece of market-neutral infrastructure Circle has built since its introduction of USDC in 2018.”
USDC is the second largest stablecoin after market leader Tether (USDT). However, unlike its rival which has expanded supplies this year, US dollar trading has been shrinking.
According to Circle, the current supply of USDC is $31 billion. Moreover, it’s down 30% since the start of the year and 45% since its all-time high.
Additionally, this dropped USDC’s market share to 23.5%, with Tether dominating 62% of the stablecoin market.
CEO Allaire warns against de-dollarization
Jeremy Allaire, CEO of Circle, warned of the growing trend of de-dollarization. Moreover, more and more countries, especially in Asia and Latin America, are abandoning the dollar.
Speaking at a cryptocurrency conference this week, Allaire said, “We have a very active dedollarization process.” he added:
“You have very significant responsiveness to the United States, risks in the American banking system, risks with the United States government itself,”
Allaire urged the government to speed up regulation of stablecoins and the issuance of a central bank digital currency for dollars. Not doing so, he said, would be a “giant missed opportunity” for the country.
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