Centre Consortium members Circle and Coinbase on Thursday announced a major upgrade to the USD Coin (USDC) protocol and smart contract, making it significantly easier for people to use USDC in payments, commerce and peer-to-peer transactions.
The update also adds additional security infrastructure to the USDC smart contract. These advancements come at a time when USDC, the fastest-growing regulated stablecoin, has seen unprecedented adoption, surpassing $1.4 billion in market capitalization and more than $90 billion in on-chain transaction volume.
USDC transactions on the Ethereum network incur transaction costs called “gas fees.” Most digital wallets require users to purchase and hold a balance of ether (ETH) in order to pay these gas fees.
This complexity presents a barrier to mainstream adoption and broad usage of digital dollar stablecoins for internet payments.
USDC 2.0 introduces “gasless sends,” which enables wallet developers to abstract away the complexity of gas fees (and the need for the customer to hold a balance of ether) and instead to delegate the payment of the gas fees to another address.
This allows developers to either provide that service themselves, or allows a third party service to pay the related fees. In other words, developers can either pay the fees on behalf of the customer or present and deduct the fees in USDC.
With this innovation, digital wallet developers can build user experiences that more closely resemble the experience of existing mobile payment apps — customers will be able to send and receive USDC payments on a peer-to-peer basis solely using USDC, with fees expressed and paid in USDC. These simplified and improved user experience flows will accelerate the virality of making and receiving payments using USDC on the internet.