Circle acquires Axelar development team! Stablecoin giant competes for cross-chain dominance

The world’s second-largest stablecoin issuer Circle acquires team members and proprietary technology from Interop Labs, the original developer of the Axelar network. Circle’s goal is to enable digital assets issued on the Arc platform to interoperate across different blockchains. The acquisition is expected to be completed early next year, limited to proprietary technology, with open-source intellectual property transferred to Common Prefix.

Cross-Chain Interoperability: The Next Battlefield for Stablecoins

(Source: Circle)

The core motivation behind Circle’s acquisition of the Axelar development team is that cross-chain interoperability has become a key battleground in stablecoin competition. USDC is currently deployed on over 15 mainstream public chains, but asset transfers between different chains still rely on bridging protocols, which face issues such as slow speeds, high costs, and security risks. As a leading cross-chain communication protocol, Axelar’s technical capabilities are precisely what Circle urgently needs.

Circle’s Chief Product and Technology Officer Nikhil Chandhok stated: “Circle is committed to supporting interoperability with numerous on-chain networks, just as we have always done through CCTP and other blockchain infrastructure products.” CCTP (Cross-Chain Transfer Protocol) is Circle’s self-developed cross-chain solution, but it is evidently not enough. Acquiring the Axelar team means Circle will gain more mature cross-chain technology and an experienced engineering team.

The Arc platform is an infrastructure for issuing and managing digital assets that Circle is building. Circle states that its goal is to enable digital assets issued on the Arc platform to interoperate across different blockchains. This includes not only USDC but also tokenized securities, tokenized commodities, and other real-world assets (RWA). If Arc can achieve truly seamless cross-chain transfers, it will significantly lower the barriers for traditional financial institutions to enter blockchain.

Another US-based stablecoin issuer, Ripple, also took action on Monday to enhance interoperability by expanding to layer-two blockchains. This synchronized move shows that stablecoin issuers have realized that mere market share competition is insufficient; technological infrastructure leadership is the key to long-term success. After the US Congress passed legislation frameworks for crypto tokens pegged to the US dollar, stablecoin usage in the US is expected to see explosive growth, further emphasizing the importance of cross-chain interoperability.

Sergey Gorbunov: From Academia to Industry, a Cross-Chain Pioneer

Sergey Gorbunov’s joining Circle is the most symbolic part of this acquisition. As CEO and co-founder of Axelar, Gorbunov has a strong academic background in cryptography and distributed systems. He earned his PhD at MIT under the supervision of renowned cryptographer Shafi Goldwasser, a Turing Award laureate.

Gorbunov’s technical expertise includes secure multi-party computation, zero-knowledge proofs, and threshold signatures—cutting-edge fields that form the foundation for building secure cross-chain bridges. Axelar’s “Universal Cross-Chain Message Passing” architecture allows for the transfer of arbitrary data and assets between different blockchains, offering far greater flexibility than traditional single-asset bridges. Gorbunov’s addition will bring top-tier technical vision and execution capability to Circle.

A Circle spokesperson emphasized: “The engineering and product team at Interop Labs represents some of the most outstanding talent in the industry.” This refers not only to Gorbunov but also to the entire team’s technical depth. Over the past few years, the Axelar team has successfully interconnected over 40 chains and handled billions of dollars in cross-chain transactions, experience that is extremely valuable to Circle.

Precise Scope of the Acquisition

Circle Acquires

· Proprietary technology and intellectual property of Interop Labs

· Complete engineering and product team, including CEO Sergey Gorbunov

· Commercial cross-chain solutions and enterprise-grade tech stack

Open-Source Community Retained

· Open-source intellectual property of the Axelar protocol transferred to Common Prefix

· Axelar Network continues to operate as an open-source project

· Community governance and tokenomics remain independent

Continuity and Transformation of the Open-Source Community

Circle carefully clarified the scope of the acquisition. They stated: “The intellectual property we acquire is limited to the proprietary technology of Interop Labs. It does not include open-source intellectual property, which will be transferred to Common Prefix.” This precise delineation reflects the delicate balance in the crypto industry between commercialization and open-source culture.

Common Prefix will take over Interop Labs’ work, continuing to maintain and develop Axelar Network. Gorbunov said: “Axelar will continue as an open-source innovator, and we are working closely with the Common Prefix team to ensure continuity and long-term support.” This arrangement protects Circle’s commercial interests while maintaining the independence and ongoing development of the open-source community.

Following the acquisition announcement, Axelar’s AXL token dropped 14.04%, indicating market concern over the loss of the core team for the open-source project. However, the transfer to Common Prefix and Circle’s long-term support commitments may alleviate these concerns. Earlier this year, the non-profit organization Axelar Foundation, which supports Axelar Network, announced it had sold $30 million worth of AXL tokens, demonstrating the project’s ongoing financial viability.

The acquisition is expected to be completed early next year, at which point Circle will integrate Axelar’s technical capabilities into the Arc platform and CCTP. For Circle, this is a key step in consolidating its second-largest position in the stablecoin market and challenging Tether. For the Axelar community, it marks an important transition from startup-led development to community governance.