Circle unveiled xReserve, enabling blockchain teams to issue USDC‑backed native stablecoins with reserves held onchain in a Circle‑deployed smart contract and interoperable with USDC.

The xReserve system aims to solve longstanding fragmentation issues in the multichain stablecoin ecosystem. Traditional bridged versions of USDC often create siloed liquidity pools and introduce additional trust assumptions through third-party bridging mechanisms. In contrast, xReserve enables direct 1:1 transfers between USDC and partner-issued stablecoins without relying on external bridges.

Key features include:

• Deposit-and-mint workflow: Users deposit USDC on a supported chain (starting with Ethereum), xReserve attests to the deposit, and the partner blockchain mints equivalent tokens.
• Burn-and-withdraw process: Tokens are burned on the partner chain, verified by xReserve, and USDC is released or forwarded on the destination chain.
• Integration with Circle's existing Cross-Chain Transfer Protocol (CCTP) and Circle Gateway for efficient, low-trust transfers.
• Future extensibility to support additional assets, such as EURC (Circle's euro-backed stablecoin).
  

Circle emphasized that xReserve unifies liquidity across chains, reduces risks from fragmented bridging solutions, and simplifies the user experience in a multichain world.

Read More: https://www.circle.com/blog/introducing-circle-xreserve