Circle, the company behind the US Dollar Coin (USDC), has integrated Arbitrum, a layer-2 scaling solution, into its Web3 infrastructure. This new development will enhance the platform’s capabilities by offering USDC-centric wallets, smart contract tools, and simplifying gas fees on the Arbitrum network.
Arbitrum is currently Ethereum’s largest layer-2 solution, with a total value locked (TVL) of around $2.5 billion, according to data from DefiLlama.
Circle Provides New Opportunities for Developers
Nikhil Chandhok, Chief Product Officer at Circle, shared on X (formerly Twitter) that the platform is designed to help developers build seamless in-app wallets using USDC. This will open up opportunities in various industries such as global payments, e-commerce, and gaming.
Along with Arbitrum, Circle’s Web3 tools also support other major blockchains, including Avalanche, Ethereum, Polygon PoS, and Solana.
USDC Aims to Compete with USDT
This move is part of the company’s strategy to grow USDC’s adoption as it competes with Tether’s USDT. Although USDC has a market capitalization of approximately $35 billion, it still lags behind USDT, which currently holds over $118 billion, according to CoinMarketCap.
Adding to the competition, PayPal’s own stablecoin, launched in 2023, reached $1 billion in market capitalization by August 2024.
Arbitrum’s Importance in DeFi
Arbitrum has played a crucial role for Circle since USDC became available on the network in 2023. This allowed users to mint USDC directly on Arbitrum, rather than relying on cross-chain bridging. Additionally, the integration with Circle’s cross-chain transfer protocol has enabled free USDC bridging across chains, making transactions even easier.
Arbitrum is a major hub for decentralised finance (DeFi), hosting nearly $4.7 billion worth of stablecoins. These stablecoins are used in various DeFi applications like lending platforms, decentralised exchanges (DEX), and leveraged trading.
This integration further strengthens Circle’s position in the growing DeFi space.
