USDC, the stablecoin created through a partnership between Circle and Coinbase, initially launched as a token on the Ethereum blockchain. Following the addition of support for the Algorand blockchain, Centre, the organization responsible for USDC’s administration, has announced Stellar as the third blockchain network to accommodate USDC. This integration is anticipated to occur sometime during the first quarter of 2021.

USDC is a digital currency designed to maintain a consistent value equivalent to the US dollar. Each USDC token is always redeemable for one US dollar, which is why it’s classified as a stablecoin. When new USDC tokens are created, the partners involved reserve an equivalent amount of US dollars in designated bank accounts.

These accounts undergo routine audits to verify that the number of USDC tokens in circulation precisely matches the amount of US dollars held in reserve. Currently, there are 2.8 billion USDC tokens in circulation.

Stablecoins offer a degree of convenience for value storage, eliminating the necessity for a traditional bank account. However, stablecoins built on the Ethereum blockchain are subject to the same challenges experienced by Ethereum users – namely, slow transaction processing times and elevated transaction costs.

By enabling users to transmit USDC on the Stellar blockchain, transactions are expected to become quicker and more affordable. Users will essentially select the network through which they wish to send USDC – Ethereum, Stellar, or Algorand. It’s important to note that when transferring between exchanges or wallet providers, both parties must support USDC on the chosen blockchain.

Circle has also created a multichain USDC swap API. This API allows authorized developers to facilitate cross-chain swaps, particularly in situations where liquidity may be limited.

Widespread adoption of this swap API by developers should lead to an improved user experience. Users will need to be less concerned with the specific blockchain being utilized for sending and receiving USDC.

This development is still ongoing. Some platforms may choose to prioritize a single blockchain, while others will offer a choice between USDC on Ethereum, Algorand, or Stellar. Still others might implement an abstraction layer, allowing for seamless USDC transfers between Ethereum and Stellar wallets, with the necessary conversions occurring automatically in the background.