Circle will collaborate with Sony to make the USDC stablecoin a primary token on Soneium, Sony’s layer-2 blockchain.
Soneium is the result of a partnership between Sony and Startale Labes. This public, Ethereum-based blockchain launched in August, aiming to create a new network framework leveraging distributed ledger technology.
“Soneium has nearly 80 established partnerships and collaborations within its ecosystem, so they’re not messing around,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “One of cryptocurrency’s biggest hurdles to adoption is ease of use—crypto holders should be able to use crypto without thinking about it too much. Soneium plans to solve this on the application layer, so partnering with a company in the stablecoin sector is a big deal.”
Bridging the Blockchain
The partnership will integrate Bridged USDC, a version of the stablecoin that keeps the original USDC on its native Ethereum blockchain while creating a proxy on Soneium. The Bridged USDC protocol will give layer-2 developers more flexibility while ensuring that the stablecoin remains fully backed by its original deposit.
“This collaboration marks a significant milestone for Circle’s mission to accelerate the adoption of our stablecoins and blockchain technology and empower creators to flourish through secure, user-friendly Web3 experiences,” said Circle CEO Jeremy Allaire in a prepared statement.
A Competitive Market
The stablecoin market is highly competitive, with new entrants emerging daily. PayPal recently made waves with the introduction of PYUSD. The payments giant’s entry into the stablecoin space reflects a broader trend of large corporations and financial institutions investing in crypto and digital assets.
In addition, there has been much anticipation for the launch of Ripple’s new stablecoin Ripple USD (RYUSD). This stablecoin will launch on the XRP Ledger blockchain, which supports higher transactions per second compared to the Ethereum blockchain.
For now, the stablecoin market is dominated by Tether’s USDT, with a market capitalization of $118.8. Circle’s USDC is a distant second at $35.6 billion. However, the partnership with Sony should give Circle a powerful new means to grow its market share.