Circle’s New Protocol Enables Native Interoperability for USDC
Circle, the blockchain firm behind USD Coin (USDC), rolled out a new feature on Tuesday, Cross-Chain Transfer Protocol (CCTP), allowing direct permission-less fund transfers between blockchains. Currently, CCTP supports Ethereum, Avalanche, and Arbitrum, with plans to add more chains later this year.
New Protocol Allows Burning and Minting of USDC on Three Blockchains
Peer-to-peer payments firm Circle launched a cross-chain transfer protocol on the Arbitrum blockchain, enabling direct transfers of USDC funds to and from Ethereum and Avax chains. The tool was developed to facilitate USDC transfers between different blockchains through native burning and minting, Circle stated.
“As a many-to-many messaging protocol, #CCTP can burn-and-mint $USDC through 6 unique routes between its 3 supported chains. As each new chain is added, it’s automatically connected to all existing #CCTP chains.”– Circle wrote in the Twitter post.
CCTP allows users to receive native USDC funds, and thanks to the Arbitrum Bridge, they can now access ecosystem apps that support the cross-chain protocol to transfer USDC to Arbitrum easily. As a result, lock-and-mint bridging is no longer required.
Similarly, the CCTP lets users move USDC to Ethereum in a few minutes as validated burn-and-mint transfers help the protocol avoid withdrawal delays previously faced when moving funds from a layer-2 chain to layer-1. Circle said numerous apps, bridges, and wallets now support CCTP for Ethereum and Avax networks.
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Cross-chain Deposits and Purchases
Developers can integrate with CCTP with three major blockchains: Ethereum, Avalanche, and Arbitrum. According to Circle’s official website, support for other blockchains is expected to be added later this year.
In addition to the aforementioned features, the CCTP allows users to utilize USDC on Ethereum “to open a position on a decentralized exchange on Avalanche.” Given that the new protocol helps route USDC funds across different chains, users no longer need to switch wallets or think about which chain they are keeping their USDC coins on.
Founded in 2013, Circle is a payments technology firm and the issuer of USDC, the world’s second-largest stablecoin by market cap. Earlier this year, USDC came under scrutiny after breaking its dollar peg for a brief period during the extreme crisis in the banking sector.
Have you ever used a feature similar to Circle’s CCTP? Let us know about your experience in the comments below.