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USDC to Replace Terra Stablecoin on Cosmos Network

Cory Russell

Sep 30, 2022 14:23


Today, USD Coin (USDC-USD) is experiencing a lot of positive with very little negative. One the one hand, the stablecoin is losing out since Binance (BNB-USD) is ceasing to support it. However, it currently seems like USDC will play a significant part in the Cosmos (ATOM-USD) ecosystem, replacing the very volatile TerraClassicUSD (USTC-USD). The announcement is only one piece of a multi-chain expansion that will significantly strengthen USDC's position in the field of decentralized finance (DeFi).

In fact, during the last several weeks, USDC has had to deal with some fairly discouraging news. The biggest cryptocurrency exchange in the world, Binance, is discontinuing support for USDC trading on its platform along with a number of other features. The action is a part of Binance's endeavor to boost adoption of its Binance USD (BUSD-USD) stablecoin.

The de-listing that USDC is facing does not go completely. Money is still possible for users to add USDC to their Binance accounts and withdraw it in the same way. However, Binance will automatically convert USDC into BUSD for trading when a customer deposits USDC. As one of the few stablecoins still accessible for trading on the app, this increases the liquidity of BUSD. Effectively, this won't affect USDC users, but it will negatively impact USDC trading volumes.

This crucial transformation for the exchange is now starting to happen. Additionally, USDC is already seeing an immediate impact; the stablecoin's market capitalisation is falling by 5%. The business that creates USDC, Circle, is resisting the bearishness, however. Investor attention is being drawn by the company's significant update.

Expanding to Five New Blockchains, USDC

Despite the bad Binance news for USDC, Circle is reassuring its customers by revealing a bevy of positive developments. Most notably, the stablecoin is playing a significant part in one of the most well-liked dapp ecosystems. The cooperation is only one of the stablecoin's five upcoming expansions into other blockchains.

Although the Cosmos network has been in turmoil for the most of the year, nothing has affected it more than Terra's demise (LUNA-USD). The Terra network was formerly the Cosmos ecosystem's biggest undertaking. Additionally, every DeFi app inside that ecosystem used its stablecoin, currently known as USTC. But many of those dapps had to switch to less safe stablecoin assets as the price de-pegged and started to spiral out of control.

Developers and Circle are working together to give USDC the position that USTC formerly had in an effort to bring Cosmos back to the level of popularity it enjoyed before the Terra debacle. In order to provide DeFi applications with a more secure stablecoin via which users can borrow, lend, and stake, Circle will be producing USDC natively on the Cosmos network. Additionally, it will lessen the necessity for users to transfer stablecoins through blockchain bridges to the network. Given that crypto bridges are among the least secure methods of moving assets, this is a significant positive.

However, Circle isn't stopping there. Four more blockchains will also get native USDC from the corporation. These are Arbitrum (ARR-USD), Near (NEAR-USD), Optimism (OP-USD), and Polkadot (DOT-USD). Even in the face of the negative news, Circle CEO Joao Reginatto hails the expansion as a major success for the firm, stating it would "enable institutions, exchanges, developers, and more to innovate and have easier access to a trustworthy and reliable digital currency."