Polkadot USDC users should not deposit XCM-transferred USDC from non-Polkadot Asset Hub parachains, Circle has warned.
USD Coin USDC $1.00, the second-largest stablecoin by market capitalization after Tether (USDT), continues expanding across different blockchain networks, now being launched on Polkadot.
USDC issuer Circle has officially launched USD Coin on the Polkadot network, the firm announced on Sept. 19. According to the Circle’s website, Polkadot USDC is immediately available for developers and users as the stablecoin can now be transferred to parachains in Polkadot via the XCM protocol using Circle Account and Circle APIs.
According to the announcement, PolkadotUSDC is natively issued on Polkadot Asset Hub, a common parachain that is designed for issuing, managing, and transferring digital assets across the Polkadot ecosystem.
Circle stressed that Circle Account and Circle APIs only support Polkadot USDC natively issued on Polkadot Asset Hub in the Polkadot ecosystem. This means that users must transfer USDC from their Circle Account to an external Polkadot Asset Hub wallet address prior to using XCM.
When transferring USDT from Polkadot Asset Hub to other parachains via XCM, users must transfer back to Polkadot Asset Hub via XCM prior to depositing into their Circle Account, Circle said, adding:
“Please do not attempt to deposit XCM-transferred USDC from a parachain other than Polkadot Asset Hub to your Circle Account, as it may not be recoverable and could result in a loss of funds.”
Polkadot support on USDC is yet another addition to the U.S. dollar-pegged stablecoin. With the latest addition, USDC now supports a total of 14 various blockchain networks, including Ethereum, Tron, Stellar, Solana and others.
Similarly to other blockchain integrations, the latest integration with Polkadot aims to maintain Circle as a major interoperable cryptocurrency as well as support low cost payments. The addition of Polkadot features trading, borrowing and lending on parachains like Centrifuge, HydraDX and Moonbeam.
Launched in 2020, Polkadot is a network of multiple independent blockchains, also referred to as parachains. Such blockchains operate in parallel with each other to allow for faster transactions while benefiting from Polkadot’s overall security and decentralization.
The number of blockchains supported by USDC is now higher than the number of networks supported by rival stablecoin USDT, which supports a total of 11 networks at the time of writing. In August 2023, USDT issuer Tether stopped minting the stablecoin on three blockchains, including Bitcoin Omni Layer, Bitcoin Cash and Kusama. The firm cited lack of interest from users.