Stablecoin issuer Circle has announced its plan to launch USDC (USD Coin) natively on Arbitrum, a layer 2 scaling solution for Ethereum.
This move is expected to bring several benefits to both Circle and its users, as well as have a significant impact on the cryptocurrency market as a whole. However, the launch date is scheduled for June 8th.
USDC is a stablecoin that is pegged to the US dollar. It was created by Circle and Coinbase in 2018 and has since become one of the most popular stablecoins on the market, with a current market cap of over $24 billion. By launching USDC on Arbitrum, Circle is expanding its offering and tapping into the growing demand for Layer 2 solutions that can help alleviate congestion and high gas fees on the Ethereum network.
Benefits of USDC on Arbitrum
According to the announcement, native USDC liquidity will grow and eventually replace the currently circulating bridged USDC liquidity that comes from Ethereum. Ahead of the USDC native launch, the bridged version of USDC on block explorers will be readdressed as USDC.e. As such, there will be notifications to ecosystem apps so as to make changes in their app UI and documentation.
Interestingly, the native USDC will allow institutional on and off-ramps through Circle and other partners. Additionally, Circle users will be able to transact with USDC more efficiently and at a lower cost, while also enjoying the same level of security and decentralization as the main Ethereum network. The native USDC will support eliminating bridge withdrawal delays and also enable faster and cheaper transactions.
Meanwhile, in a separate blog post, the Arbitrum Foundation said the stablecoin issuer intends to bring Cross-Chain Transfer Protocol (CCTP) to the Layer 2 network after the successful launch of native USDC.
With this expansion, Circle is positioning itself as a key player in the fast-evolving blockchain ecosystem. As more investors and businesses recognize the potential of stablecoins and Layer 2 solutions, one can expect to see further innovation and growth in the space.
Recall that in 2022, Circle experienced slow growth due to pressure on the company from competitors as a result of the conversion of USDC to BUSD.
