Issuer of second biggest stablecoin across crypto market USD Coin (USDC), Circle announced launch of USDC stablecoin on Cosmos blockchain. The plan was disclosed on Wednesday, 28th September, 2022, during Coverge22 conference organized in San Francisco.
Earlier, the interconnected network of blockchains over Cosmos were using Terra network’s native algorithmic stablecoin UST. However, the fall of UST stablecoin in May this year created a void across the crypto market as well as within the Cosmos ecosystem.
Following the UST stablecoin depegging with USD, other contenders like wrapped USDC were available on the Cosmos. They were not up to the mark in terms of usability and they also lacked the security offered by a full-fledged stablecoin.
USDC’s announcement could resolve the issue for Cosmos in dire need of a stablecoin for inter-chain operations. Circle’s stablecoin is created on Ethereum, which could be transferred to Cosmos via cross-chain bridge. The option was dropped given the security concerns though.
As a result, USDC will be minted on Cosmos blockchain itself from next year. Availability of the second biggest stablecoin on Cosmos’s platform will allow its transfer across Osmosis and upcoming dYdX chains using inter-blockchain communication (IBC).
Stiff Competition in Stablecoin Sector
The announcement of USDC entering the Cosmos came as an effort to take required steps to counter growing competition within 150 billion USD worth of stablecoin space. USDC has also announced plans to enter Arbitrum One, NEAR Protocol, Polkadot and Optimism.
Currently USDC stands at a market capitalization of around 48.7 billion USD, which recently dropped from over 52 billion USD. It aspires to surpass the top stablecoin USDT having a market cap of more than 67.9 billion USD and is taking possible measures to do the same.
Broader stablecoin market has seen movement as big players have recently announced their respective plans. USDT has announced plans to expand to Polkadot. BUSD issuer Binance also announced to convert all the stablecoin investment—USDC, USDP and TUSD, into BUSD stablecoin.
Source: https://www.thecoinrepublic.com/2022/09/29/usdc-stablecoin-will-be-minted-on-cosmos-in-2023/