Circle, a prominent issuer of stablecoins, has introduced a new standard to simplify the process of launching its stablecoin, USDC, on different networks.
Circle, a prominent issuer of stablecoins, has introduced a new standard to simplify the process of launching its stablecoin, USDC, on different networks. In a recent blog post, the company unveiled the "bridged USDC standard," enabling developers to deploy the token in two phases.
During the initial phase, a third-party developer gains control of the token contracts, and the token on the new network is backed by a native version on another network. In the subsequent phase, Circle assumes control of the contracts, directly backing the token with its reserves. It's worth noting that not all deployments will progress to the second phase.
The token generated in the first phase is unofficial and cannot be issued or redeemed by Circle. Nonetheless, it functions as a proxy to USDC and can be extended to any ecosystem where bridging is feasible. If Circle and the third-party developer decide to formalize the token, they can seamlessly upgrade to native issuance in the future.
The primary aim of this new standard is to eliminate the need for migrations, where users must exchange an unofficial USDC version for an official one once it becomes available. By adopting the bridged USDC standard, migrations should become unnecessary as the unofficial tokens held in users' wallets can be converted into official ones.
Implementations of this bridge standard were already implemented by Consensys’ Linea Network and Scroll, both zkEVM layer-2 networks on Ethereum. Circle previously launched native versions of USDC on the Base network in September and on Polygon in October.
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