Circle’s Strategic Move: Boosting Stablecoin Liquidity on Solana

Circle, the stablecoin issuer, plans to increase liquidity on Solana by launching its Cross-Chain Transfer Protocol (CCTP) on the network soon.

This protocol allows users to easily move USDC across compatible blockchain networks by burning and minting the stablecoin. CCTP operates on seven different networks: Ethereum, Avalanche, Base, Noble, Arbitrum, OP Mainnet, and Polygon PoS.

Circle
Source: Crypto Slate
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Circle: CCTP to Increase Solana Stablecoin Liquidity

Circle has announced a pre-mint address that will allow CCTP to coin USDC on Solana prior to its March 26 debut. This deliberate action allows Circle to create and maintain a USDC balance on Solana. However, the pre-minted tokens will not be added to the circulating supply until Circle’s formal authorization is received.

Solana’s head of strategy, Austin Federa, stated that CCTP facilitates USDC stablecoin transfers from other networks to Solana. He also emphasised the protocol’s ability to catalyse innovations such as on-chain payroll, as well as Solana’s accessibility to users across networks.

Meanwhile, Solana co-founder Anatoly Yakovenko expressed similar comments, claiming that CCTP might serve as a seamless bridge for frictionless Real World Assets (RWA).

“CCTP is what I envision a frictionless RWA bridge to look like. Circle continues to deliver outstanding technologies that enhances the user experience and safety,” Yakovenko stated.

USDC’s Market Capitalization Increases

USDC, the second-largest stablecoin by market capitalization, has seen a 22% increase in supply to approximately $30 billion. This increase reflects the strong market sentiment that has driven Bitcoin and Ethereum prices to all-time highs.

Circle’s attempt to increase stablecoin liquidity on Solana is consistent with the network’s emerging status as a stablecoin transaction powerhouse. As of March 8, Solana’s USDC transfer volume exceeded USDT on the TRON and Ethereum blockchains by more over $4 billion apiece.

Meanwhile, market watchers have credited this impressive achievement to Solana’s active DeFi sector. On-chain data from DeFiLlama shows that the total value of assets locked (TVL) on the network is currently $3.165 billion. It has doubled from $1.4 billion in January.

These advances have also boosted Solana’s native SOL coin, which has risen to a two-year high of $150, despite previous ties to defunct FTX and network disruption issues.

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