Circle Introduces USD Coin on Ethereum zkSync

Stablecoin issuer Circle has broadened its support for its native stablecoin, USD Coin (USDC), by integrating with the Ethereum zero-knowledge layer-2 solution zkSync. This move will enable various ecosystem apps and decentralized finance (DeFi) protocols to utilize native USDC on zkSync for functions such as payments, trading, borrowing, and lending. Circle emphasized that developers can now build on a stable foundation with official support from Circle. With the addition of zkSync, USDC is now compatible with 16 different blockchains including Ethereum, Solana, Base, Arbitrum, and others. Zero-knowledge proofs play a crucial role in verifying the integrity of a transaction without revealing any supporting evidence. Rollups are used to consolidate transactions from the Ethereum main layer into a single transaction. Together, these two components form the key elements of the zkSync technology, which ensures fast and cost-effective transactions at layer 2 before sending the finalized proof back to the Ethereum mainnet. As of April 9, 2024, the zkSync ecosystem comprises over 180 decentralized applications and more than 5.7 million unique active wallet addresses in the past 30 days. Similar to USDC on other blockchains, zkSync USDC can be directly redeemed for U.S. dollars through Circle, digital wallets, and exchanges. Users can exchange zkSync USDC for other USDCs via cross-chain bridges. Institutional investors can also access the stablecoin via Circle Mint. Circle highlighted that businesses and developers can benefit from zkSync’s fast and low-cost transactions and native account abstraction, in addition to its overarching objective of increasing Ethereum’s throughput while preserving its foundational principles. Although Circle has been focusing on expanding USDC access to other blockchains, it has occasionally paused such efforts. On February 21, Circle abruptly terminated USDC minting on the Tron blockchain without disclosing the reason behind it, stating that it consistently evaluates the suitability of all blockchains as part of its risk management process. Last year, the U.S. Securities and Exchange Commission sued Justin Sun and the Tron Foundation, accusing them of offering unregistered securities and engaging in manipulative trading, allegations that Sun vehemently refutes.