US-based crypto exchange platform KuCoin has opened the Polkadot network deposit service for the widely-used USD Coin (USDC), the second-largest stablecoin by market capitalization after Tether.
For now, only USDC deposits are available on KuCoin, but Polkadot developer Velocity Labs said they are working hard to enable withdrawals soon.
Velocity Labs is dedicated to turning the Polkadot ecosystem into a hotspot for DeFi space. As an ecosystem builder and venture studio, the firm is focused on creating the infrastructure, tools, and products needed to promote DeFi applications on Polkadot.
USDC has become the most issued native stablecoin on Polkadot, but getting easy access to Circle’s flagship product has been a hurdle for wider adoption.
The move comes barely a year after Circle introduced USDC to the Polkadot ecosystem of parachains, broadening the stablecoin's native availability to more blockchains.
Polkadot, known for its interoperability, connects multiple application-specific blockchains, called parachains.
Circle issued the native version of USDC on the Polkadot Asset Hub, a “system parachain” designed as an asset issuance platform for the ecosystem. The hub allows the stablecoin to be transferred across parachains via the XCM protocol. As a result, all interconnected parachains within the Polkadot ecosystem, along with their users, now have access to the dollar-backed stablecoin.
Similar to other blockchain integrations, Polkadot support keeps USD Coin an interoperable cryptocurrency while also supporting low-cost payments.
USDC is the second-largest stablecoin in the crypto market, with a market capitalization of around $34 billion. The largest stablecoin, Tether's USDT, holds a market cap of $117 billion.
USDC issuer Circle operates as a regulated money transmitter and holds licenses across the United States. This was a key consideration for KuCoin, especially after the exchange and two of its founders were charged in March by U.S. federal prosecutors for violating anti-money laundering laws.
The CFTC also filed a parallel civil action against KuCoin, alleging that the exchange illegally operated a digital asset derivatives platform.