Circle's stablecoin gathers reinforcements after Binance delisting
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.
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.)