Fintech firm Circle has announced the availability of Cross-Chain Transfer Protocol (CCTP) on the mainnet for developers building on Ethereum and Avalanche networks. The protocol enables the native flow of USDC across supported chains through a “burn and mint” process, whereby the native stablecoin is burned on the source chain and an equivalent amount is minted on the destination chain. This eliminates the risks and complications of traditional “lock and mint” approaches.
CCTP is already live with bridges and protocols such as Multichain, Celer, LayerZero, LI.FI, MetaMask, Hyperlane, Router, Socket, Rarimo, Wormhole, and Wanchain. Circle plans to expand CCTP to additional chains in H2 2023. Joao Reginatto, Circle’s VP of Product, noted that the protocol provides USDC native interoperability across Web3 and can solve liquidity and capital inefficiency issues in DeFi.
“With CCTP, developers can simplify the user experience, and their users can trust that they are always transacting with a highly liquid, safe, and fungible asset in native USDC. This milestone makes USDC a natively multi-chain digital dollar.”
Circle’s new tool aims to unify liquidity and simplify the user experience within the DeFi ecosystem. To use the protocol, users must initiate a USDC transfer on a source chain, which is then burned and attested by Circle before the equivalent amount is minted on the destination chain.
FUD and Expansion
Last month’s de-pegging event and the US regulatory crackdown resulted in significant outflows for USDC. However, Circle is pushing for USDC’s expansion across multiple blockchains. In March, it partnered with Bitcoin custodian and licensed private bank Xapo to integrate USDC payment rails. Circle has also applied for regulatory approvals in France as part of its European expansion efforts.