The stablecoin issuer Circle has announced the native version of USD Coin ($USDC) on the Ethereum layer-2 protocol Polygon ($MATIC) has gone live.
USDC can now be directly accessed by users and developers on the blockchain, eliminating the previous need to bridge the stablecoin from Ethereum to another network.
The press release said: “Circle brings USDC natively to new blockchain networks to empower developers to build on a stable foundation they can trust. Native USDC is officially issued by Circle and is always redeemable 1:1 for US dollars.”
Gone with the USDC bridge
Prior to this update, users of the Polygon protocol were using a bridged version of USDC, called USDC.e, which was sourced from the Ethereum blockchain. This bridged token was not directly issued by Circle.
Now, the new Polygon version will be part of the official USDC cryptocurrency and maintain a redemption value at a 1:1 ratio with US dollars.
Circle has communicated that it intends to phase out the service of bridged USDC from 10 November onwards. A notice has been issued to users, warning them of potential risks associated with sending USDC.e to Circle Mint accounts after that date.
The statement said: “After that time, only native USDC will be supported moving forward. This means after November 10th, you should not attempt to send bridged USDC.e to your Circle Mint account, as it may not be recoverable and could result in a loss of funds.”
Business applications from Polygon-based USDC
The broader implications for businesses and developers of this announcement was highlighted by Circle. With USDC now on Polygon, businesses can create decentralised applications (dApps) using this stablecoin.
It promises swift, low-cost transactions suitable for multiple purposes. The press release said: “Businesses and developers interested in designing for mainstream user experiences can now choose Polygon PoS USDC for payments, remittances, trading, borrowing, lending and more.”
Circle Mint and Circle’s developer APIs have also been updated to support the Polygon-based USDC, aligning with Polygon’s scaling benefits.
Polygon market
With USDC’s native introduction on Polygon, Circle has expanded its reach in the crypto market. Data from October 2023 shows that the Polygon PoS ecosystem is home to over 475 dApps and boasts more than 300,000 active wallet addresses.
DeFiLlama’s data reveals that Polygon is currently ranked as the fifth-largest chain by total value locked (TVL). At the time of writing, it has $756million in TVL and records a 24-hour volume of $86m.
Meanwhile, its native cryptocurrency MATIC is ranked 13th by market capitalisation. As of 10 October, it was trading at $0.52 and down 7% in the past seven days.
USDC Interoperability
Moving forward, Circle has plans to enhance USDC interoperability on Polygon. They aim to introduce a cross-chain transfer protocol for Polygon by the end of this year. This would enable better connectivity with other blockchain networks.
A statement on social media app X confirmed: “Once integrated with the Polygon PoS Bridge, USDC transfers between Ethereum and Polygon will become more streamlined.”
