Circle Launches Cross-Chain Transfer Protocol for USDC

According to an announcement on April 26, Circle, the company behind US Dollar Coin (USDC), has launched a new mainnet protocol that allows for the transfer of USDC between Ethereum and Avalanche. This eliminates the need for Circle partners or third-party bridges for Avalanche users who hold USDC on Ethereum to transfer their coins from one network to the other.

The Cross-Chain Transfer Protocol (CCTP) employs a different approach from traditional bridges by destroying tokens sent to its contract and issuing new tokens on the receiving network that can be redeemed for bank deposits by depositing them with Circle or its partners.

The team expects CCTP to solve the problem of fragmentation in the Web3 ecosystem by reducing the number of unofficial versions of USDC on various networks resulting from tokens being bridged from one network to another. Many of the largest cross-chain protocols, including Celer, Hyperlane, LayerZero, LI.FI, MetaMask, and Wormhole, have pledged to use CCTP.