A press release published on Sept. 20 revealed that Wormhole, a prominent blockchain bridge platform, has incorporated Circle’s Cross-Chain Transfer Protocol (CCTP). This groundbreaking development will allow seamless transfers of USD Coin (USDC) across multiple blockchains, including Avalanche, Arbitrum, Ethereum, and Optimism.
This feature is currently available for end-users via the Portal bridge. While developers can easily integrate it into their applications using Wormhole Connect.
The Wormhole team stated that the latest integration will minimize user confusion and liquidity issues.
Wormhole’s official blog post read:
“On these new and emerging chains, multiple versions of these bridged USDC tokens can exist, leading to fragmented liquidity, poor pricing, and a confusing experience for users and developers alike.”
The integration of CCTP was intended to address this issue by introducing a “natively cross-chain USDC” that can be minted or burned on any chain linked to Wormhole, as per the report.
Initially, when Circle launched USDC, it was exclusively accessible on Ethereum. Users had to utilize a bridge to transfer USDC to another blockchain, which involved locking up their native USDC on Ethereum and minting a derivative version on the target chain. Moreover, various bridging protocols with many derivative versions of USDC could sometimes confuse and pose challenges for end-users.
Circle expanded its stablecoin to another blockchain, Stellar, in 2021. They kept adding it to more chains, and as of September 20, it’s now available on 14 different networks.
Although users can transfer USDC from one network to another, certain limitations exist. They still needed to deposit their USDC into a Circle partner’s account on the source chain and subsequently withdraw them from the same partner’s account on the other chain.
Circle Launched CCTP To Simplify USDC Transfer Across Different Blockchains
Circle introduced CCTP in April last year to streamline the transfer of USDC. It uses smart contracts and an application programming interface (API) to enable users to directly burn their USDC on one chain and have it re-minted on another network without depositing it into a Circle partner account first.
At first, CCTP exclusively supported USDC transfers between Avalanche and Ethereum or vice versa. However, Circle has broadened the protocol’s capabilities to encompass Arbitrum and Optimism. According to the documents, Circle intends to introduce more networks in 2023.
The latest announcement revealed that CCTP is now part of the Wormhole bridge interface. It will allow Wormhole users to move their native USDC between chains supported by CCTP.