Circle Launches Native USD Coin on Arbitrum Network

Recently, Circle announced plans to release a new native version of its USD Coin stablecoin on the Arbitrum network on June 8.

Circle will replace the current version of USDC, an Ethereum-based token that has been bridged to Arbitrum, with a native token that runs and resides on the Arbitrum network itself, according to a blog post:

“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.”

Before the launch, Circle intends to rebrand the current Ethereum-based version of USDC as “USDC.e.” The original version will be listed as “bridged USDC,” while the new version based on Arbitrum will bear the “USDC” moniker.

According to Circle, the purpose of this initiative is to expedite transactions through the use of cross-chain transfer protocols (CCTPs).

CCTPs are protocols that facilitate the transfer of assets between blockchains, enabling users to consolidate liquidity and support crypto and Web3 assets across portfolios.

The Arbitrum team writes, “This will allow USDC to move natively to and from Ethereum (and other supported chains) in minutes, with no withdrawal delays.”

In the past 12 months, the overall market for stablecoins — cryptocurrencies designed to trade at or near the exact value of a fiat currency, such as USDC — has trended negatively for most companies.

Circle is no exception, as its market share has decreased significantly over the past year. According to Coingecko data, USDC’s market capitalization has decreased from $55 billion to $29 billion during this period.

The market share of Tether’s USDT stablecoin increased from 47.04 percent in 2022 to 65.89 percent in 2023, resulting in a market capitalization of approximately $83.2 billion.