Circle launches Paymaster to allow users pay gas fees with USDC

Stablecoin issuer Circle has introduced a new feature called Circle Paymaster, enabling users to pay gas fees using the USDC stablecoin.

The USDC (USDC) issuer said in an announcement that the on-chain utility solution Circle Paymaster was now live on Arbitrum and Base, two leading Ethereum (ETH) layer-2 solutions. 

With this product, users on the L2s can now use USDC rather than ETH when paying for transaction fees.

In the crypto market, blockchain users need transaction fees often paid via a chain’s native token. This gas fees requirement has typically meant users must hold tokens such as Ether and others on-chain, with transaction failures likely when one has no funds to cover gas fees.

Paymaster removes this challenge by allowing users to pay with USDC, removing the need for one to have the required native token.‍ The feature is permissionless and composable, which means developers can work with any wallet compatible with the ERC-4337 token standard.

Circle’s launch of Paymaster adds to the company’s Gas Station offering.

While Paymaster users utilize their USDC to pay for gas fees, Gas Station allows developers to pay for gas costs for users. Developers who sign up for the Gas Station feature offer a gasless experience for users across their decentralized applications. 

Gas Station works with Circle’s programmable wallets and requires developers to create a Circle Console account.

Circle will expand access to Paymaster beyond Arbitrum and Base in coming months, with additional networks including Ethereum, Solana and Polygon PoS.

Transaction charges across Paymaster will be 10% of gas fees per transaction. However, Circle is waiving this charge until June 30, 2025 to incentivize adoption.