Circle’s test environment is already connected to the Goerli testnet, whose merger will be followed by an upgrade of the main blockchain

USDC will continue to only support Ethereum PoS

10.08.2022 - 06:45

252

2 min

What’s new? Circle, the issuer of the USDC stablecoin, has outlined its position on the future transition of the Ethereum network from the Proof-of-Work (PoW) consensus algorithm to Proof-of-Stake (PoS). Circle said the stablecoin will only support the PoS algorithm after the Ethereum upgrade.

Circle’s blog announcement

USDC is a dollar-backed centralized stablecoin with a market capitalization of $54 billion (as of August 10). The token is ranked four by CoinMarketCap.

What other statements have been made? The Circle team emphasized that it is responsible for the Ethereum ecosystem, companies, developers, and end users. Circle’s test environment is already connected to the Goerli Ethereum testnet, and developers will be watching closely for further upgrades. The company stressed that after the Ethereum upgrade USDC will exist only as a single valid “version” on the PoS algorithm.

About switching to PoS. The Merge upgrade will increase Ethereum’s speed, efficiency, security, and scalability. As a result of the algorithm change from PoW to PoS, the way coins are earned on the network will change from mining to staking. The upgrade may also result in a split into two networks, one of which will continue to run on PoW. The Merge release is scheduled for the end of September, more exact dates will be known after the Goerli testnet merger on August 11.

Earlier, the developers of Chainlink, a decentralized oracle network built on Ethereum, also reported that they would not support any forks of the network. The protocol will continue to operate on the main blockchain during and after the transition to PoS.

In July, Circle released a detailed report on the reserves backing USDC. As of June 30, the capitalization of the asset amounted to $55,57 billion, with $55,7 billion in collateral. Of this amount, $13,58 billion in fiat is held at regulated US banks and another $42,12 billion is placed in US Treasury short-term bonds, which have an average maturity of 44 days.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy