Sep 29, 2022 - Economy

Circle's stablecoin gathers reinforcements after Binance delisting

Illustration of several different coins combined to form one glitching coin

Illustration: Annelise Capossela/Axios

Circle Internet Financial, the issuer behind the dollar-pegged USD Coin, is reinforcing its position as the stablecoin race heats up.

Driving the news: The second-largest stablecoin is getting a boost, per announcements made during Circle’s inaugural Converge22 conference, to make usdc available on Cosmos, a multi-chain ecosystem that has been looking to fill the hole that another, more dysfunctional stablecoin left behind.

Why it matters: In effect, Circle's usdc will assume the role in Cosmos vacated by ust when Do Kwon's Terra collapsed in May.

  • That stands to be helpful, given that ust's role in the the multi-chain ecosystem had helped it supplant MakerDAO's stablecoin, dai.

State of play: This will expand Circle's usdc universe to 14 blockchains, according to the company, but its Cosmos partnership could easily open up more venues.

  • Developers and users will be able to access usdc via Cosmos' Inter-Blockchain Communication protocol (IBC), which is also growing, with 49 chains activating it over the past 30 days.

What's next: What's next: Circle said it's going to start minting onto a neutral chain of the Cosmos Hub blockchain in early 2023.

  • It will also be available on Arbitrum, Near, Optimism and Polkadot by the end of 2022.

Zoom out: The Cosmos Hub wants to be the Internet of blockchains.

  • For now, it acts as a foundation for other blockchains to build into its inter-chain ecosystem, though a recently published whitepaper shows that could change.
  • Circle's Cosmos migration follows the blue-chip decentralized finance app dydx's own move to the multi-chain ecosystem in late June; dydx also happens to be the largest consumer of usdc.

Details: usdc lives natively on eight blockchains: Ethereum, Solana, Avalanche, TRON, Algorand, Stellar, Flow, and Hedera.

The intrigue: Circle's latest expansion plan could be looked at as a counter move in the recent stablecoin war.

  • usdc lost market capitalization this month after Binance said it would delist it and auto-convert existing usdc held in customer accounts to its namesake busd. (That's set to take place today.)

The bottom line: While Binance is flexing its dominance as the world's biggest exchange, Circle appears to be flexing its ability to strike deals with strategic partners.

(Editor's note: This article has been corrected to specify that usdc will be issued onto a neutral blockchain of the Cosmos Hub, not directly onto the Hub, as previously stated.)

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