Circle launches Paymaster to allow users pay gas fees with USDC

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

USDC (USDC) the issuer declared in a announcement that the Circle Paymaster on-chain utility solution was now available on Ethereum leaders Arbitrum and Base (ETH) layer 2 solutions.

With this product, L2 users can now use USDC rather than ETH to pay transaction fees.

In the crypto market, blockchain users require transaction fees, often paid through a chain’s native token. This gas fee requirement typically means users must hold tokens such as Ether and others on-chain, with transaction failures likely when one does not have funds to cover gas fees.

Paymaster removes this challenge by allowing users to pay with USDC, removing the need to have the required native token.‍ The feature is permissionless and composable, meaning 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 offerings.

While Paymaster users use their USDC to pay gas fees, Gas Station allows developers to pay gas fees for users. Developers who sign up for the Gas Station feature provide a gas-free experience to users in 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 the coming months, with additional networks including Ethereum, Solana and Polygon PoS.

Transaction fees on Paymaster will be 10% of gas fees per transaction. However, Circle is waiving this fee until June 30, 2025 to encourage adoption.