USDC, the second largest stablecoin in terms of market cap, is set to expand to five new blockchains in a bid to reaffirm market position and increase accessibility, announced Circle on Wednesday.
By next year, USDC should function on NEAR, Arbitrum, Optimism, Polkadot, and Cosmos, said the company’s Chief Product Officer Nikhil Chandhok at Circle’s Converge22 conference in San Fransisco.
Cosmos is expected to be compatible read by early 2023, and the other chains will soon follow.
“Extending multi-chain support for USDC opens the door for institutions, exchanges, developers and more to innovate and have easier access to a trusted and stable digital dollar,” said Joao Reginatto, VP of Product at Circle, in a statement.
With the addition of 5 new chains, USDC will be operable on 14 blockchains. The coin already works on Solana, Ethereum, TRON, Polygon, Avalanche, Algrorand, Hedera, Stellar, and Flow.
USDC’s main competitor, the $68 billion USDT by Tether, currently operates on 14 blockchains with a likely Polygon rollout.
Cross-Chain Transfer Protocol
Circle also announced Cross-Chain Transfer Protocol for USDC to help streamline transactions across multiple chains. The initiative will assist developers create apps, wallets, and tools to enhance seamless transfer of the stablecoin.
Circle’s leadership believes existing systems for transacting USDC across various blockchains are “creating fragmented liquidity and a complicated user experience,” thus, limiting its growth.
“Cross-Chain Transfer Protocol ultimately enables USDC to function as a universal dollar liquidity layer across ecosystems, providing the most capital efficient way to transport value across the crypto ecosystem,” Reginatto added.
The new protocol is scheduled to arrive on Ethereum and Avalanche by the end of the year and on other chains by next year.
Competing for market growth
Competition in the stablecoin market has been heating up lately with the introduction of several new coins. Also, rivals such as Tether and Binances’ BUSD have stepped up efforts to capture growth.
As a result, USDT has lost considerable market share since the beginning of the year.