In a recent revelation, Circle confirmed its intentions to debut an original rendition of the USD Coin stablecoin on the Arbitrum network, scheduled for June 8.
Based on a blog post, Circle has designed a strategy to supersede the current USD Coin, an Ethereum-oriented token that’s transitioned to Arbitrum, with a native token that operates and is housed exclusively on the Arbitrum network.
Building Towards a Seamless Transition
Ahead of this promising rollout, Circle intends to rebrand the existing Ethereum-centric version of USDC as “USDC.e.” The first iteration will be classified as “bridged USDC,” while the new, Arbitrum-native version will proudly wear the “USDC” badge.
Circle’s ambition for this significant move is to expedite transactions using cross-chain transfer protocols (CCTPs).
These CCTPs are fundamental processes that facilitate asset movement between blockchains, enabling users to consolidate liquidity. They extend their support to crypto and Web3 assets across diverse portfolios.
Riding the Wave of Market Dynamics
However, this progressive change to USDC emerges amid a general downward trend for stablecoins. Stablecoins, such as USDC, which aim to maintain parity or close to the exact value of a fiat currency, have witnessed a downturn for most entities in this sector over the past year.
Circle hasn’t been an exception to this trend. It experienced a notable decrease in its market portion over the last year. According to data provided by CoinGecko, the market capitalization of USDC has plummeted from $55 billion to a diminished $29 billion within this duration.
Conversely, Tether seems to be one of the rare anomalies that have managed to swim against the tide. Its USDT stablecoin saw its market share jump from 47.04% in 2022 to a significant 65.89% in 2023, taking its market capitalization to a whopping $83 billion.