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- Circle Internet Financial released the Cross-Chain Transfer Protocol (CCTP) to move stablecoin USDC between blockchains.
- The technology seeks to replace bridges and is faster, safer, and cheaper than traditional methods.
Circle Internet Financial Introduces Cross-Chain Transfer Protocol
Circle Internet Financial has released the Cross-Chain Transfer Protocol (CCTP), a new method to move stablecoin USDC between blockchains that is faster, safer, and cheaper than traditional bridge methods. Initially, the technology will be used for USDC transfers between the Ethereum and Avalanche blockchains, with more chains coming in the second half of 2023. Developers can integrate relevant smart contracts to make it easy for users to move their stablecoins.
The CCTP aims to break down the barriers currently fragmenting USDC’s $30 billion market cap across multiple blockchains, replacing bridges that create derivative tokens with a method that destroys USDC on the source chain and recreates it on the destination chain.
How CCTP Solves Fragmentation
USDC has a $30 billion market cap across many different blockchains. While Circle issues “native” USDC on top networks like Ethereum and Avalanche, those asset tranches were partitioned, requiring complicated and sometimes expensive cross-chain transfers. The Cross-Chain Transfer Protocol replaces bridges that solve the problem by creating derivative tokens, instead destroying USDC on the source chain and recreating it on the destination chain.
The technology simplifies the user experience and ensures that users are transacting with a highly liquid, safe, and fungible asset in native USDC.
Benefits of CCTP
CCTP offers a faster, safer, and cheaper method to move stablecoin USDC between blockchains. By breaking down the barriers to USDC’s fragmentation, developers can simplify the user experience, making it easy for users to move their stablecoins across different blockchains. The technology replaces bridges that create derivative tokens with a method that destroys and recreates USDC on the source and destination chains, ensuring that users are transacting with a highly liquid, safe, and fungible asset in native USDC.
Infrastructure providers with CCTP coverage at launch include wallet company MetaMask, bridge operator Wormhole, and bridge aggregator LI.FI.
