Circle Expands Beyond Ethereum With Support For USDC On Polygon

Circle, expanding beyond the Ethereum mainnet for the first time, is launching support for its USDC stablecoin on Polygon’s proof-of-stake (PoS) chain, the company said today.

Polygon builds Layer 2 scaling solutions for Ethereum. Its PoS chain currently represents a total value locked (TVL) of $2.43B.

The move is designed to enable Polygon-based businesses and developers to decrease settlement times and lower costs by accessing USDC directly using Circle Account. In a statement, Circle said account users will be able to convert fiat currency to Polygon USDC in just seconds. 

The integration will make it easier to manually bridge USDC from Ethereum to Polygon.

Jeremy Allaire, CEO and Co-founder of Circle, described Polygon as “an attractive entry point for businesses and developers to build in an established and liquid ecosystem with faster settlement times and reduced costs.”

Stablecoin Contagion

The news comes as confidence in decentralized stablecoins took a hit amid the collapse of Terra Classic’s algorithmic stablecoin, UST.

USDC is among the very few stablecoins to have exhibited growth amid the fallout from UST. While its market cap receded 9.4% from the start of March through April, its capitalization quickly rebounded in early May as the panic surrounding algorithmic stable tokens ignited.

USDC’s capitalization bounced on May 11 and rallied to new all-time highs at the end of the month. It posted an all-time high of $54.1B on June 6.

USDC Market Cap. Source: CoinMarketCap

Tether Redemptions

Tether (USDT), the leading centralized stablecoin and USD Coin’s primary rival, suffered a rush of redemptions last month as persistent concerns regarding its backing prompted holders to de-risk. 

In three weeks, USDT’s market cap tumbled 13% from an all-time high of $83.2B on May 7 to less than $72.5B. Tether briefly depegged as holders raced to offload USDT, with Tether’s price dropping down to $0.95 on May 12.

USDT market cap. Source: CoinMarketCap

MakerDAO’s long-standing decentralized stablecoin, DAI, also benefited amid the turmoil in the stablecoin markets. While DAI’s capitalization topped out at $10.4B in February, it rebounded 8% since establishing a floor of $6.4B in early May.