How Circle is driving stablecoin liquidity on Solana

Summary:

• Stablecoin issuer Circle will introduce its Cross-Chain Transfer Protocol (CCTP) to enhance the liquidity of stablecoins on Solana.

•Solana executives highlighted CCTP’s potential to simplify the transfer of stablecoins from various networks on the network.

• As the transfer volume of USDC continues to soar, Solana rises as a stablecoin trading platform.

Stablecoin issuer Circle has enhanced liquidity on Solana with the upcoming Cross-Chain Transfer Protocol (CCTP).

The protocol enables users to seamlessly transfer USDC on supported blockchain networks by burning and minting stablecoins. CCTP runs on seven networks: Ethereum, Avalanche, Base, Noble, Arbitrum, OP Mainnet, and Polygon PoS.

CCTP will enhance the liquidity of Solana’s stablecoin

Circle announced a pre-minting address that allows CCTP to mint USDC on Solana ahead of its official launch on March 26. This strategic move enables Circle to build and maintain USDC balances on Solana. However, pre-minted tokens will need to wait for formal authorization from Circle before they can be included in the circulating supply.

Austin Federa, director of strategy at Solana, pointed out that CCTP can simplify the transfer of USDC stablecoins from various networks to Solana. He also highlighted the protocol’s potential to inspire innovation, such as on-chain wage payments and accessibility to Solana provided to users from different networks.

Meanwhile, Solana co-founder Anatoly Yakovenko expressed similar sentiments, adding that CCTP can serve as a seamless bridge to real-world assets (RWA).

Yakovenko said, "CCTP is the frictionless RWA bridge I imagined. Circle will continue to introduce amazing technologies that can improve user experience and security."

USDC market capitalization growth｜Source: TradingView

The supply of USDC, the second-largest stablecoin by market capitalization, increased by 22% to approximately $30 billion. This increase indicates that positive market sentiment is driving Bitcoin and Ethereum prices to record highs. .

Circle’s move to enhance stablecoin liquidity on Solana coincides with the network’s rise as a stablecoin trading platform. As of March 8, Solana’s USDC transfer volume surpassed USDT on the TRON and Ethereum blockchains, exceeding $4 billion each.

Meanwhile, market observers attribute this laudable milestone to Solana’s active DeFi space. On-chain data from DeFiLlama shows that the total value of assets locked on the network (TVL) currently reaches $3.165 billion. This figure doubled from the $1.4 billion recorded in January.

These developments have also given rise to the development of Solana’s native token SOL. Although Solana has been associated with the collapse of FTX and network outage issues, due to recent developments, the price of Solana’s platform token SOL has recently reached $150. reached its highest level in two years.