According to Cointelegraph, Circle Internet Financial, the manager of the US Dollar Coin (USDC) stablecoin, has integrated the layer-2 scaling chain Arbitrum into its Web3 infrastructure platform. This integration, announced in a blog post on September 12, aims to enhance the capabilities of USDC-centric programmable wallets, smart contract tooling, and gas-fee abstraction on Arbitrum. Arbitrum, with a total value locked (TVL) of around $2.5 billion, is Ethereum’s largest layer-2 solution, as reported by DefiLlama.
The Web3 platform is designed to help developers create seamless in-app wallets that support USDC for various applications, including global payments, e-commerce, and gaming, according to Nikhil Chandhok, Circle’s chief product officer. Circle’s Web3 tooling is already integrated with other blockchain networks such as Avalanche, Ethereum, Polygon PoS, and Solana.
This integration is part of Circle’s ongoing efforts to accelerate the adoption of USDC, which competes with Tether’s USDT for market dominance. USDC’s market capitalization stands at approximately $35 billion, significantly lower than USDT’s $118 billion, according to CoinMarketCap. The competition has intensified with the introduction of PayPal’s US dollar-backed stablecoin, PayPal US (PYUSD), which reached a market capitalization of $1 billion in August 2023.
In 2023, Circle made USDC available natively on Arbitrum, allowing applications to mint USDC directly on the layer-2 chain without needing to bridge from other chains. Circle also integrated Arbitrum into its cross-chain transfer protocol, enabling free USDC bridging by managing minting and burning across chains.
Arbitrum is a crucial platform for Circle due to its status as a central hub for decentralized finance (DeFi) among layer-2 solutions. According to DefiLlama, Arbitrum hosts nearly $4.7 billion worth of stablecoins, which are used in various applications such as lending, decentralized exchanges (DEX), and leveraged perpetual trading. The platform is also gaining traction in tokenized real-world assets (RWA), which could become a multi-trillion dollar market in the future.
Recent developments on Arbitrum include Ondo Finance expanding access to its US Dollar Yield Token (USDY) and asset manager Franklin Templeton expanding its FOBXX to the scaling chain. These moves highlight the growing importance of Arbitrum in the blockchain ecosystem.
