Circle recently announced plans for a June 8 launch of a new native version of its USD Coin stablecoin on the Arbitrum network.
According to a blog post, Circle will replace the existing version of USD Coin (USDC), an Ethereum-based token that’s been bridged to Arbitrum, with a native token that runs and resides on the Arbitrum network itself:
“This will be the official version of USDC that is recognized within the Arbitrum ecosystem and will ultimately replace the currently circulating bridged version of USDC that comes from Ethereum.”
Ahead of the launch, Circle plans to rename the existing Ethereum-based version of USDC to “USDC.e.” The original version will be listed as “bridged USDC,” and the new Arbitrum-based version will don the “USDC” mantle.
The goal of this endeavor, according to Circle, 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.
“This will enable USDC to move natively to-and-from Ethereum (and other supported chains) in minutes,” writes the Arbitrum team, adding “no more withdrawal delays.”
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’s been no exception, as it saw its own market share decline significantly over the past 12 months. USDC’s market capitalization has shrunk from $55 billion to $29 billion over that period, according to CoinGecko data.
One of the few outliers bucking the trend appears to be Tether (USDT), whose USDT stablecoin rose from a market share of 47.04% in 2022 to 65.89% in 2023, bringing its market capitalization to just over $83 billion.