Stablecoin issuer Circle announced launching USDC natively on Arbitrum on June 8th. The latest move will replace the currently circulating bridged version of the stablecoin that comes from Ethereum.
A statement released by Circle said Arbitrum will be renaming the Ethereum-bridged version of USDC on block explorers as “USDC.e” ahead of the launch next week. The fintech firm also said there will be an outreach to eco apps to make the same change in their app UI and documentation.
“USDC issued by Circle will be native to Arbitrum and will be considered the official version of USDC for the Arbitrum eco. Over time, native USDC liquidity will grow and replace the currently circulating ‘bridged USDC’ liquidity that comes from Ethereum.”
Circle underscored several benefits of the native USDC launch on the popular layer 2 network. As such, the upcoming support by Cross-Chain Transfer Protocol (CCTP) is likely to eliminate bridge withdrawal delays. An upgradeable smart contract for future improvements by the fintech firm, as well as the possibility for institutional on and off-ramps, are some of the other perks.
As for liquidity migration, Circle asserted that Arbitrum will collaborate with eco apps to ensure a smooth transition of liquidity from bridged USDC to native USDC over time. During this period, the Arbitrum Bridge will not have any immediate changes, and it will continue to operate normally for bridging USDC to and from Ethereum.
Going forward, Circle expects to bring CCTP to Arbitrum after the launch of native USDC. The integration into the Arbitrum Bridge is expected to allow the stablecoin to move natively to-and-from Ethereum (and other supported chains) in minutes with no withdrawal delays.
The latest development comes a month after the USDC issuer announced the mainnet availability of Cross-Chain Transfer Protocol (CCTP) which 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 also revealed its plansto expand CCTP to additional chains in the second half of 2023.
