Circle, the stablecoin issuer, has made an exciting announcement regarding the launch of USDC on Arbitrum, a popular layer 2 networks. This move, set to take place on June 8th, will replace the current bridged version of the stablecoin that operates on Ethereum.
In preparation for the launch, Circle will rename the Ethereum-bridged version of USDC on block explorers as “USDC.e.” Additionally, the fintech firm plans to reach out to ecosystem apps, urging them to implement the same change in their app UI and documentation.
The native USDC on Arbitrum will be considered the official version for the platform’s ecosystem, issued directly by Circle. Over time, the liquidity of native USDC is expected to grow and gradually replace the circulating bridged USDC from Ethereum.
Circle highlights several advantages of launching native USDC on the Arbitrum network. One notable benefit is the anticipated elimination of withdrawal delays through the upcoming support of the Cross-Chain Transfer Protocol (CCTP). Furthermore, Circle’s upgradeable smart contract will allow for future improvements, and institutional on and off-ramps may become possible.
Regarding liquidity migration, Circle assures users that collaboration with ecosystem apps will ensure a seamless transition from bridged USDC to native USDC over time. During this process, the Arbitrum Bridge will continue operating normally to bridge USDC to and from Ethereum without immediate changes.
Circle plans to introduce CCTP to Arbitrum following the launch of native USDC. This integration into the Arbitrum Bridge will enable the stablecoin to move natively between Ethereum and other supported chains within minutes, free from withdrawal delays.
This latest development comes a month after Circle announced the availability of Cross-Chain Transfer Protocol (CCTP) on the mainnet. This protocol allows USDC to flow natively by burning the stablecoin on a source chain and minting an equivalent amount on a destination chain.
Circle also revealed its plans to expand CCTP to additional chains in the latter half of 2023.
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