The Cosmos ecosystem has been struggling with its' stablecoin situation since the collapse of Terra's UST. There have been several announcements of different stablecoins getting ready to emerge from UST's ashes, like Comdex's Harbor Protocol and its collateral based stablecoin and Kujira's USK, but nothing has yet to fill the hole that UST left in the ecosystem.
Well, with several crypto-based news sources reporting the news, the announcement has been made that USDC is coming to the Cosmos in 2023 in a native form. This means that there will not be a need for bridges or wrapped versions of the world's second most popular stablecoin!
Native USDC Will Change The Cosmos Game
With Circle bringing a regulated stablecoin like USDC natively to the ecosystem via it's own blockchain! This is another mega bullish sign for the Cosmos ecosystem. Recent news of VanEck showing interest in the ecosystem sent a bit of a shock wave as it was really the first real nod from the major institutional investors. Now with the addition of a native USDC, it went from more of a nod to a high five from the big players!
The world's largest hedge fund, BlackRock bought a major stake in USDC's parent company a couple of months back, so this move is just another major jolt of not only attention, but validation coming to the Cosmos ecosystem!
Using Its Own Generic Issuance Blockchain
The road for USDC to Cosmos has apparently been in the works for about a year. In June, dYdX announced it was bringing its' decentralized leverage trading platform from Ethereum to the Cosmos ecosystem on its' own chain. Being the USDC is the biggest stablecoin used on the platform, it's only fitting that it take the journey with dYdX into the Cosmos.
Circle is reported to be working with several developer and validator labs in the ecosystem which includes players like Osmosis Labs to come up with its' own 'generic issuance blockchain' that will be ran by validators. With USDC being under the radar of the institutional players, it is going to be highly scrutinized by regulators. With the issues that Tornado Cash faced, and regulators wanting censorship abilities in USDC, they are talking about how to bring censorship abilities to the chain like being able to block specific IBC channels or some kind of functionality like that.
USDC Positioned To Be The US Digital Dollar
With Circle looking at censorship functionality, and the players involved behind the stablecoin and it's issuer, Circle, it's apparent to much of the market that USDC is in line to be the US version of a digital dollar. Now it's not in the way that some people think. The Fed chairman has even said that the US is not looking down the path of their own CBDC and would let the private markets work that out. Well, looks like USDC is going to be the pick of the regulators. Just an opinion based on all the reports released over the last few months.
This will open up the Cosmos ecosystem to more scrutiny and regulatory eyes down the line. If you look at what has been done with Ethereum and the fact that the US SEC has basically claimed all Ethereum transactions to be under the ruling of the US government due to the location of the nodes running the network. This is going to be a huge concern for the USDC blockchain and other IBC chains as there is already a massive centralization issue with the validator sets on just about every chain you look at.
It will be extremely important for validators to not have their nodes running in US-based data centers, or in data centers in reach of the US government. But being that Circle is going to be in control of the blockchain, they will probably have hand-picked validators which will mostly consist of exchanges and other large players, so we will have to keep an eye on how invasive regulators are going to get in our IBC space. If we cannot control the direction of the USDC chain, then we must make sure the rest of the ecosystem is as decentralized as possible.
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Posted from my blog with Exxp : https://news.carbonzero.zone/2022/09/28/usdc-is-coming-to-the-cosmos/