Circle has announced the launch of a new native version of its USD Coin (USDC) stablecoin on the Arbitrum network. The existing Ethereum-based token that’s been bridged to Arbitrum will be replaced by the new native token. The official version of USDC will be recognised within the Arbitrum ecosystem and will ultimately replace the currently circulating bridged version of USDC that comes from Ethereum. Circle plans to rename the existing Ethereum-based version of USDC to “USDC.e.” The original version will be listed as “bridged USDC,” while the new Arbitrum-based version will be known as “USDC.” The goal of this endeavour is to speed up transactions through the use of cross-chain transfer protocols (CCTPs).
CCTPs are protocols that handle the transfer of assets between blockchains, allowing users to unify liquidity. They support both crypto and Web3 assets across portfolios. The use of CCTPs will enable USDC to move natively to-and-from Ethereum and other supported chains in minutes, eliminating withdrawal delays.
USDT Market Share Rises as USDC Shrinks
The changes to USDC come as the overall market for stablecoins, cryptocurrencies such as USDC designed to trade at or close to the exact value of a fiat currency, has trended negatively for most companies in the space over the past 12 months. Circle has seen its own market share decline significantly over the past year, with USDC’s market capitalisation shrinking from $55 billion to $29 billion over that period, according to CoinGecko data.
Tether’s USDT stablecoin, on the other hand, has been an outlier, bucking the trend and rising from a market share of 47.04% in 2022 to 65.89% in 2023, bringing its market capitalisation to just over $83 billion.