Circle has announced that it will be launching the USDC stablecoin natively on Arbitrum on the 8th of June, 2023.
According to the company, the move will replace the bridged version of the stablecoin from Ethereum, which is currently in circulation.
With the announcement by Circle, USDC will be native to Arbitrum and will be the official version of the stablecoin recognized across the Arbitrum ecosystem. It will also eventually replace the bridged version of the stablecoin from Ethereum. In its statement, Circle stated that Arbitrum would rename the Ethereum-bridged version of the USDC stablecoin as USDC.e ahead of the launch of the native USDC on the 8th of June, 2023. The company added that it would also conduct an outreach to other apps in the ecosystem to make the same changes in their documentation and application UI.
“USDC issued by Circle will be native to Arbitrum and will be considered the official version of USDC for the Arbitrum ecosystem. Over time, native USDC liquidity will grow and replace the currently circulating ‘bridged USDC’ liquidity that comes from Ethereum.”
Benefits Of The Native USDCCircle highlighted several benefits of the native USDC launching on the highly popular Arbitrum layer-2 network. According to the company, the biggest advantage would be bringing Cross-Chain Transfer Protocol (CCTP) to Arbitrum. This would eliminate bridge withdrawal delays. Other benefits highlighted by Circle include upgradable smart contracts and the possibility of introducing institutional on and off-ramps, along with other improvements. Upgradable smart contracts would allow Circle to conduct future enhancements to the contract.
Circle also talked about liquidity migration in its statement, asserting that Arbitrum would collaborate with all ecosystem apps to ensure a smooth transition of liquidity from bridged USDC to native USDC. The Arbitrum Bridge will not undergo any immediate changes during the transition period. It will continue operating normally and bridge USDC to and from Ethereum.
What The Future HoldsMoving forward, Circle hopes to bring CCTP to Arbitrum following the launch of the native USDC stablecoin, which would allow the stablecoin to move natively to and from Ethereum and other chains within minutes, eliminating withdrawal delays. The announcement comes a month after Circle had announced the mainnet availability of the Cross-Chain Transfer Protocol (CCTP). Circle has also announced plans to expand the Cross-Chain Transfer Protocol to other chains in late 2023.
Back in April, Circle’s Vice President of Product, Joao Reginatto, explained that the Cross-Chain Transfer Protocol would give USDC native interoperability across the Web3 ecosystem. He further added that it would help the protocol address issues related to capital inefficiency and liquidity in decentralized finance (DeFi).
“With CCTP, developers can simplify the user experience, and their users can trust that they are always transacting with a highly liquid, safe, and fungible asset in native USDC. This milestone makes USDC a natively multi-chain digital dollar.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
