Stablecoin issuer Circle is enhancing liquidity on Solana through the forthcoming launch of its Cross-Chain Transfer Protocol (CCTP) on the network.

This protocol enables users to seamlessly transfer USDC across supported blockchain networks by burning and minting the stablecoin. CCTP operates on seven networks: Ethereum, Avalanche, Base, Noble, Arbitrum, OP Mainnet, and Polygon PoS.

CCTP to Boost Solana Stablecoin Liquidity

Circle has unveiled a pre-mint address allowing CCTP to mint USDC on Solana before the March 26 launch. This strategic move empowers Circle to establish and maintain a USDC balance on Solana. However, the pre-minted tokens await inclusion in the circulating supply until Circle’s formal authorization.

Austin Federa, Solana’s head of strategy, noted that CCTP streamlines USDC stablecoin transfers from various networks to Solana. He also highlighted the protocol’s potential to catalyze innovations such as on-chain payroll and the accessibility of Solana for users from diverse networks.

Meanwhile, Anatoly Yakovenko, Solana’s co-founder, echoed similar sentiments, adding that CCTP could act as a seamless bridge for frictionless Real World Assets (RWA).

“CCTP is what I imagine a frictionless RWA bridge will look like. Circle continues to ship amazing technology that improves user experience and safety,” Yakovenko said.

USDC, the second-largest stablecoin by market capitalization, has witnessed a 22% surge in its supply to around $30 billion. This increase indicates the positive market sentiment that has propelled Bitcoin and Ethereum’s prices to record highs.

Circle’s initiative to enhance stablecoin liquidity on Solana aligns with the network’s emergence as a powerhouse for stablecoin transactions. As of March 8, Solana’s USDC transfer volume surpassed that of USDT on TRON and Ethereum blockchains by over $4 billion each.

Meanwhile, market observers have attributed this laudable milestone to Solana’s active DeFi sector. On-chain data from DeFiLlama shows the total value of assets locked (TVL) on the network currently stands at $3.165 billion. It has doubled from the $1.4 billion recorded in January.

These developments have also catalyzed Solana’s native SOL token, which has reached a two-year high of $150 despite past ties to defunct FTX and network disruption issues.

Source : BeInCrypto by Oluwapelumi Adejumo / Mar 9, 2024