Circle, the stablecoin issuer, has extended its support for its native stablecoin, USD Coin (USDC), to the Ethereum zero-knowledge layer-2 solution zkSync. In an announcement on April 9, Circle stated that many leading apps and DeFi protocols are expected to support native USDC on zkSync for payments, trading, borrowing, and lending. Developers can now use USDC on zkSync to build on a stable foundation that is officially supported by Circle. With this expansion, USDC is now supported on 16 blockchains, including Ethereum, Solana, Base, Arbitrum, and others.
The zkSync technology combines zero-knowledge proofs, which ensure transaction integrity without revealing supporting evidence, and rollups, which bundle transactions off the Ethereum main layer into a single transaction. This combination allows zkSync to process transactions quickly and cost-effectively at layer 2, sending the finalized proof back to the Ethereum mainnet. As of April 9, 2024, the zkSync ecosystem has over 180 decentralized applications and over 5.7 million unique active wallet addresses in the last 30 days.
Similar to USDC on other blockchains, zkSync USDC can be redeemed one-for-one for U.S. dollars directly through Circle or digital wallets and exchanges. zkSync USDC can also be exchanged for other USDCs through cross-chain bridges. Institutional investors can access the stablecoin through Circle Mint. Circle stated that businesses and developers use zkSync to benefit from fast, low-cost transactions and native account abstraction, with the goal of increasing Ethereum’s throughput and preserving its foundational values.
Circle has been steadily expanding access to USDC on other blockchains, although it has temporarily halted such efforts in the past. On February 21, Circle abruptly stopped USDC minting on the Tron blockchain without providing a reason. Circle stated that it continuously evaluates the suitability of all blockchains as part of its risk management process.
Last year, the United States Securities and Exchange Commission filed a lawsuit against Justin Sun and the Tron Foundation, accusing them of offering unregistered securities and engaging in manipulative trading. Justin Sun denies these allegations.
Relatedly, Binance, following Circle’s lead, has also dropped support for USDC on Tron.