Fintech firm Circle announced the mainnet availability of Cross-Chain Transfer Protocol (CCTP) for developers building on Ethereum and Avalanche networks. The protocol will essentially allow USDC to flow natively across supported chains by burning the native stablecoin on a source chain and minting the same amount on a destination chain.

The “burn and mint” process results in USDC “teleporting” from one blockchain to another by eliminating the complications and risks of traditional “lock and mint” approaches.

USDC Interoperability

Some of the bridges and protocols that are already live with CCTP on the mainnet are – Multichain, Celer, LayerZero, LI.FI, MetaMask, Hyperlane, Router, Socket, Rarimo, Wormhole, and Wanchain. Circle further intends to expand CCTP to additional chains in the second half of 2023.

In a statement on April 26th, Joao Reginatto, Circle’s VP of Product, explained that Cross-Chain Transfer Protocol gives USDC native interoperability across Web3. He added that the liquidity and capital inefficiency issues in decentralized finance (DeFi) due to the risks and fragmented nature of bridged assets can be solved by the protocol.

“With CCTP, developers can simplify the user experience, and their users can trust that they are always transacting with a highly liquid, safe, and fungible asset in native USDC. This milestone makes USDC a natively multi-chain digital dollar.”

Stablecoins are a crucial element of the DeFi economy. With the new tool, Circle aims to unify liquidity across the ecosystem and simplify the user experience.

To use the protocol, users will have to begin by initiating a transfer of USDC on a source chain. The burn event will then be observed and attested by Circle on the source chain. The firm is then tasked with providing authorization to mint the specified amount of USDC on the destination chain. Finally, the attestation is used to trigger the mintin