Circle aims to solve the challenges associated with cross-chain “Bridges” with the help of “Cross-chain Transfer Protocol”.
USDC is the second top stablecoin in the crypto market by market cap and Circle is the backend company that manages all the financial operations of USDC. This company is highly regulated in the United States but still failing to grab full trust among crypto investors citing the uncertain regulatory environment in the US.
On 26 April 2023, Circle announced the launch of a Cross-chain Transfer Protocol (CCTP) on the mainnet of Ethereum & Avalanche blockchain.
This will allow USDC stablecoin transactions between Ethereum & Avalanche blockchain networks easily, more similar to the transaction of crypto assets on the same network.
In the present time, the majority of the Defi protocols use Cross-chain Bridges & they manage stablecoin reserve separately & further issue wrapped stablecoin on other networks so that crypto users can easily transfer their stable coins from one network to another.
The Cross-Bridge system is not much safer but still, an easy method to use any stablecoin on the foreign crypto network. Now here CCTP will replace traditional tricks.
In this initial rollout of CCTP, many crypto platforms integrated the CCTP system e.g. MetaMask wallet, Celer Network, Hyperlane, LayerZero, wanchain, etc.
USDC vs USDT
After the meltdown of the Silicon Valley Bank (SVB), USDC stablecoin faced significant sell pressure in early March of this year. After March, the USDC market cap saw a significant downfall because of the surging unclear regulatory environment in the US.
In May 2022, After the downfall of the Terra( Luna) empire, many stablecoins, including Tether, faced significant sell pressure. But it was USDC which was standing strong and in that phase, USDC grabbed huge dominance over USDT stablecoin. At that time people were expecting that USDC will surpass USDT by early of 2023 but current data is showing something different picture.