The native Arbitrum-based version of USD Coin by Circle is set to replace the existing token that bridges USDC liquidity from Ethereum (ETH). The token will play an important role in the upcoming cross-chain developments scheduled by Circle.
USDC launches natively on Arbitrum, liquidity migration starts
According to the joint official announcement shared by fintech heavyweight Circle and the team of L2 scaling network Arbitrum, USDC, the second largest stablecoin, is set to launch its native version on Arbitrum (ARB) on June 8, 2023. The existing Ethereum-based token will be labeled as "USDC.e" in explorers.
1/ Hey Arbinauts!💙🧡@Circle is launching USDC natively on @Arbitrum on June 8th!— Arbitrum (💙,🧡) (@arbitrum) June 1, 2023
To learn more about this launch and how to migrate liquidity from “bridged USDC” to native USDC, please check out our blogpost 👉https://t.co/N89GIo6wPE
Just like other versions of USDC launched "natively" across various EVM-compatible blockchains, the Arbitrum-based token will be fully reserved and redeemable 1:1 for U.S. Dollars from Circle treasury. Institutions will be able to use them as a native on- and off-ramp to the blockchain.
The Arbitrum-based smart contract for the new token (0xaf88d065e77c8cC2239327C5EDb3A432268e5831) will be open for further enhancements by Circle, USDC issuer.
The value migration from the previous version of USDC stablecoin will be organized by Arbitrum, together with the decentralized applications of its ecosystem:
Arbitrum will be working with ecosystem apps to provide a smooth transition of liquidity from bridged USDC to native USDC over time. There will be no immediate changes to the Arbitrum Bridge, and it will continue to operate normally for bridging USDC to and from Ethereum.
Some necessary adjustments will be made in the UX/UI of Arbitrum-based dApps and their documentation.
Arbitrum (ARB) strengthens its dominance in L2 segment
The launch of native USDC on Arbitrum is aligned with the cross-chain ambitions of Circle's stablecoin. Arbitrum-based token will be included in Cross-Chain Transfer Protocol (CCTP). The mechanism is designed to allow Circle customers to move value between various blockchains in minutes.
As covered by U.Today previously, USDC is the second largest stablecoin with a market capitalization of over $28 billion.
Arbitrum (ARB) is the largest second layer scaling solution on Ethereum (ETH). The network is responsible for $5.7 billion in TVL, or about 65% of the entire L2 ecosystem on Ethereum (ETH).