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Circle to Issue Native USDC on Arbitrum! Multi-chain issuance of native stablecoins has become mainstream

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Circle to Issue Native USDC on Arbitrum! Multi-chain issuance of native stablecoins has become mainstream

Circle is set to launch its native stablecoin USDC on Arbitrum on 6/8, becoming the first L2 with native USDC! In addition, stablecoin issuance on multiple chains is becoming mainstream, not only significantly reducing cross-chain risks but also making fund withdrawals more efficient.

Circle to Issue Native USDC on Arbitrum

According to an announcement from Circle, they will be issuing native USDC on Arbitrum on 6/8. The USDC issued at that time will be the official version, and the current cross-chain version of USDC on Arbitrum will be renamed to "USDC.e," eventually being phased out in favor of the official USDC.

By issuing native USDC, Circle believes it will bring the following benefits:

  1. Fully reserved and can be redeemed 1:1 for US dollars at any time.
  2. Allows institutions to convert assets through Circle and other partners.
  3. With support for the Cross-Chain Transfer Protocol (CCTP), it can eliminate withdrawal delays during cross-chain transfers.

After the official launch of USDC on Arbitrum next week, the number of blockchains supported by USDC will reach 11, including not only the 9 listed on the official website, but also Cosmos and Arbitrum, with Arbitrum being the first Layer 2 solution to have native USDC.

Multi-Chain Native Asset Issuance Becoming Mainstream for Stablecoins

During the recent trend of emerging public chains, "cross-chain bridges" have become necessary tools for transferring assets across different chains, but there have been numerous security incidents due to high technical risks. The recent Multichain trust crisis also led Binance to temporarily suspend the deposit of related cross-chain assets.

To reduce the risks associated with cross-chain transactions, the simplest method is to issue native assets on multiple blockchains, with stablecoins being the most suitable for this approach.

Looking at the current trend, the number of blockchains supported by USDT and USDC continues to increase. With Circle's introduction of the Cross-Chain Transfer Protocol (CCTP), synthetic assets have been directly replaced by the "burn and mint" method, significantly reducing cross-chain risks.

Additionally, Binance recently urged users not to forget to verify the credibility of the issuers behind the stablecoins they hold. In an effort to enhance user security, Binance has reached out to operators such as Tether and Circle, hoping to expand support for native stablecoins from issuers.

Considering this, the decision made by the New York Department of Financial Services (NYDFS) to not pursue Paxos for issuing the Ethereum version of BUSD outside of supervision does indeed have its risk considerations.