Circle USDC grabbed lots of attention due to its pioneering attributes. It offers high stability that is backed by highly liquid cash and cash-equivalent assets. In terms of market capitalization, it is the second-largest stablecoin. Additionally, the protocol consistently tries to expand its user base and reach. Following the same vein, it is now launching USDC stablecoin on the Polkadot asset hub.
What Does This Mean For USDC and Polkadot Users?
On September 19th, USDC issuer Circle announced that the USD coin is now available on the Polkadot network. As per its website, the users and developers can access it easily. They can also transfer them to parachains in Polkadot through the XCM protocol. The usage of Circle APIs and Circle Account will make the process very easy.
The statement also gives more information on the asset’s functionality. According to it, Polkadot Asset Hub facilitates the issuance of Polkadot USDC. The former is a common parachain created to execute the transferring, managing, and issuing of assets. It ensures the seamless routing of tokens across the Polkadot ecosystem.
The statement also underlined the scope of support for Polkadot USDC. It said that Circle APIs and Circle Account only support assets natively issued on Polkadot Asset Hub. In this scenario, users ultimately use XCM for their tokens. With this new addition, they have to first transfer USDC from their Circle Account to an external Polkadot Asset Hub wallet. Only then, the transfer will be executed.
Moreover, when utilizing other parachains through XCM for transferring USDC, the users will have to transfer the assets back to Polkadot Asset Hub. They also need to do it before depositing the assets into their Circle Account. In addition to that, there was also a warning in the statement. It advised users not to deposit XCM-transferred USDC from a parachain other than Polkadot Asset Hub to their Circle Account.
If that happens, the assets may get lost and become irrecoverable forever. Notably, Polkadot going in sync with USDC is another inclusion to the US dollar-pegged stablecoin. With this new addition, USDC is now compatible with 14 different protocols including Ethereum, Solana, Stellar, Tron, and others. Like other blockchain integrations, this focuses on making Circle an interoperable and low-cost option.
Furthermore, Polkadot recently added lending, borrowing, and trading features. It would be making them available on platforms like Moonbeam, HydraDX, and Centrifuge. Polkadot was launched in 2020 with the aim of bringing independent blockchains together. It called all these different blockchains as parachains. These parachains remain synchronous with each other allowing faster transactions.
Besides, they all benefit from Polkadot’s decentralization and overall security. USDC has achieved a higher number of blockchains than its competitor stablecoin USDT. The latter supports only 11 networks right now. In August 2023, USDT issuer Tether excluded three blockchains from its network. It does not mine stablecoins on Kusama, Bitcoin Cash, and Bitcoin Omni Layer anymore.
This update certainly catapults USDC to the forefront of the stablecoin space. Crypto users will certainly give preference to a network with a bigger base.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/09/20/circle-rolls-out-usdc-stablecoin-on-polkadot-and-issues-a-warning/