Chainlink, Circle Partner to Enhance USDC Cross-Chain Transfers – Here’s How it Works

Source: Circle

Decentralized oracle platform Chainlink (LINK) announced the latest partnership with Circle to ease cross-chain USDC stablecoin transfers.

Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has integrated Circle’s Cross-Chain Transfer Protocol (CCTP), which enables USDC to flow natively across blockchains, thus unifying liquidity.

The integration not only offers a secure way to transfer USDC but also opens avenues for new use cases with USDC. This means that developers can now build payments and other DeFi interactions as well.

“I’m pleased to see that the defense-in-depth security infrastructure of CCIP, with multiple layers of decentralization, is something highly valued by developers building with USDC,” said Sergey Nazarov, the co-founder of the decentralized oracle network.

Chainlink’s CCIP enhances blockchain interoperability, bridging multiple blockchain networks together seamlessly. Further, it ensures accurate, tamper-proof data transfer across chains using decentralized oracles.

The protocol supports major blockchain networks including Ethereum, BNB Chain, Avalanche and layer2 networks like Polygon, Arbitrum, among others.

Similarly, Circle’s CCTP is designed to facilitate native USDC transfers from one chain to another securely through burning and minting. For instance, a user accesses an app built on CCTP to initiate a transfer of USDC across blockchains. The app facilitates a burn of only the specified amount of the stablecoin on the source chain.

CCTP has been so far integrated by various interoperability-focused protocols including Celer Network, Wormhole and Li.Fi.

USDC Community Embraces the Strategic Move

Following the announcement on Tuesday, the stablecoin community reacted positively to the integration. One user said this “breakthrough in interoperability is a significant addition to the tokenized stack.”

Another crypto HODLer wrote on X (formerly Twitter) that the collaboration is a “bullish development.”

🔥 Bullish Development 🌋#Chainlink (LINK) has integrated $Circle's cross-chain transfer protocol (CCTP) with its CCIP system to securely move #USDC across blockchains.#LINK 🚀🚀🚀🚀 pic.twitter.com/htt80jd8IJ

— Rohitash Yadav (CCM) (@RYadav8177) January 16, 2024

Interestingly, the integration comes right at the time as Jeremy Allaire, CEO of Circle, expressed his optimism during the ongoing World Economic Forum in Davos, Switzerland, that the US will approve stablecoin laws this year.

He said that there is a “very good chance” US lawmakers approve a stablecoin bill this year.

“Stablecoins in particular remain the killer app for blockchain technology. We’re starting to see widening usage all around the world,” he said in an interview with CNBC.

“It’s been a really powerful time for that and we think 2024, with things like the spot ETF and world regulatory clarity, is going to open this up even wider.”