Circle, the developer of the dollar-backed stablecoin, USD Coin (USDC), has announced in an official blog post its support for its native stablecoin on Arbitrum, one of the leading layer-2 scaling solutions for the Ethereum (ETH) blockchain.
The Rise of Stablecoins
Stablecoin use cases have boomed exponentially in the recent past. These digital tokens are being increasingly used in lending, payments, insurance, prediction markets, and decentralized autonomous organizations (DAO) along with cross-border crypto payment systems and global remittances.
Earlier this year Cardano (ADA) introduced a new overcollateralized algorithmic stablecoin “DJED” that is pegged to the US Dollar. In addition, numerous financial institutions all across the world have also started experimenting with stablecoins.
Recently, Mitsubishi UFJ Financial Group (MUFG) announced its stablecoin issuance platform “Progmat Coin” which will soon be used by banks in Japan to launch Japanese yen-pegged stablecoins on several public blockchains.
Similarly, the National Australia Bank (NAB), one of the four biggest Australian banks, has also joined the stablecoin bandwagon, creating an Australian Dollar pegged stablecoin called “AUDN.”
USDC Will Be Native to Arbitrum
In the latest development, Circle has brought its native USDC on the Ethereum scaling solution, making Arbitrum the ninth blockchain to extend support for the stablecoin. According to the official blogpost, the integration of USDC on Arbitrum will allow businesses utilizing Circle to conveniently swap USDC across supported chains, avoiding the costs and time lags typically linked with bridging transactions.
Furthermore, various industries such as exchanges, fintechs, institutional traders, and developers can access Arbitrum USDC via the Circle Account and Circle APIs for a number of use cases including making programmatic payouts, trading, borrowing, and lending on decentralized exchanges (DEX) like GMX and UniSwap, among many others. Users can also use Arbitrum’s USDC for payments for e-commerce like non-fungible token (NFT) marketplaces and gaming.
After the launch of USDC on Arbitrum, Circle also expects to bring Cross-Chain Transfer Protocol (CCTP) to the layer 2 blockchain. It will enable USDC to flow natively across by burning the stablecoin on a source chain and minting the same amount on a destination chain. Circle had previously revealed its plans to expand CCTP to additional chains in the second half of 2023.
Moreover, on June 7, Circle Internet Singapore Pte. Ltd. (Circle Singapore), an affiliate of Circle announced that they have received a license to operate in Singapore. The license allows Circle Singapore to offer digital payment token services, alongside cross-border money transfer services and domestic money transfer services in the city-state via its various products and services