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In a notable development in the cryptocurrency sector, Circle, the organization responsible for USD Coin (USDC), announced plans to broaden its stablecoin support to six additional blockchains over the next two months.
According to a joint announcement from Coinbase and Circle, USDC, which is currently accessible on nine blockchains, including Ethereum, Arbitrum, Avalanche, Stellar, Tron, Flow, Algorand, Hedera, and Solana, will be introduced on more chains.
Although the announcement does not specify which blockchains will be added, previous communications from Circle indicate that Base, NEAR, Optimism, Polkadot, Polygon PoS, and Cosmos are expected to be the new integrations between September and October. As a result, USDC will be supported on a minimum of 15 blockchains.
USDC was created to maintain a 1-to-1 peg with the US Dollar. Despite being the second-largest stablecoin, it has experienced a decline in market share relative to Tether. This shift was driven by concerns regarding USD reserves linked to the collapsed Silicon Valley Bank.
The addition of six new blockchains represents a significant advancement for USDC, potentially serving as a catalyst for increased stablecoin adoption.
Coinbase and Circle: A Transformative Partnership
The recent developments stem from a partnership between Coinbase and Circle, with Coinbase acquiring an undisclosed minority stake in Circle. This collaboration effectively dissolved the Center Consortium, which was originally responsible for issuing USDC. Consequently, Circle will take full control of the governance and issuance of USDC internally.
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The two organizations assert that the primary goal of stablecoins is to ensure broad accessibility, stability, and usability around the clock. In this context, the statement emphasizes that,
“Support for new chains allows USDC to better serve a growing number of businesses, applications, and developer communities who are choosing USDC as the on-chain dollar.”
Tether (USDT) currently operates on 14 blockchains, while Paxos, another well-known stablecoin, is limited to the Ethereum network. Thus, USDC has the potential to become the most widely available stablecoin in the coming two months.
The Stablecoin Landscape
The stablecoin market has been generating considerable attention in recent weeks. Earlier this month, a prominent payment service provider, PayPal, in collaboration with Paxos, launched its new stablecoin, PYUSD. Despite initial mixed responses, PYUSD has been performing well in the markets, even receiving support from a US legislator.
The recent actions by Coinbase and Circle indicate a flourishing stablecoin market, with applications that may extend beyond cryptocurrency trading to include foreign exchange, international settlements, and financial inclusion.
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