Circle launches new bridge (CCTP) to facilitate USDC transfer

Circle has announced the launch of its new bridge system, the Cross-Chain Transfer Protocol (CCTP), which aims to facilitate the transfer of USDC stablecoins between different blockchains.

CCTP uses a “burn and mint” process to avoid blocking liquidity in traditional bridges, and is currently available on Ethereum (ETH) and Avalanche (AVAX).

This new protocol is a major breakthrough for the crypto industry, as it addresses one of the biggest challenges facing users who want to transfer assets between different blockchains. Currently, users have to go through a complex and tedious process to transfer assets from one blockchain to another, which can be costly and inefficient.

This is a big accomplishment for Circle, the issuer of USDC and the second most capitalized stablecoin on the market behind Tether’s USDT.

In fact, instead of the classic bridge system, where it is necessary to tie up liquidity in a smart contract to retrieve its equivalent on another blockchain, the USDC works in a more natural way. Indeed, when a user uses CCTP, his USDC will be burned on blockchain 1 and mint on blockchain 2. Thus, no liquidity will be blocked in the bridge, and USDC movements will be much more transparent.

“CCTP removes the need to link USDCs via traditional lock and mint approaches, improves liquidity in the blockchain ecosystem, and allows developers to provide their users with a seamless and secure experience by moving USDCs natively between chains.”

The company has been working for several months on the development of this new CCTP, which is expected to be a major growth driver for the USDC ecosystem. For now, the Cross-Chain Transfer Protocol is available on the Ethereum (ETH) and Avalanche (AVAX) networks.