Stablecoin issuer Circle has announced that it will only support the Ethereum proof-of-stake chain after on-chain integration.
This integration, known as The Merge, is planned for the coming months. The current network is currently working with the proof-of-work algorithm.
However, the proof-of-work algorithm has been heavily criticized for its high energy use. The environmental damage of energy use is a frequent topic of discussion, both in the crypto community and among politicians. The transition to the Proof-of-Stake algorithm is expected to play an important role in reducing Circle’s energy consumption.
Circle Supports Proof of Stake
Circle noted in its blog post following its decision to support only the proof-of-stake chain, that they do not foresee disruptions to USDC on-chain capabilities or other services.
“While we do not speculate on the possibility of forking after the Ethereum Merge, USDC can only exist in a single valid version as an Ethereum-based asset”
Ethereum founder Vitalik Buterin also dismissed the possibility of long-term adoption of the Ethereum proof-of-work fork following the transition to proof-of-stake.
USDC is the second largest stablecoin after Tether, with a stablecoin supply of $45 billion. Stablecoin serves as a crucial building block for Ethereum DeFi innovation.
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