EIP-7702 in the Pectra Upgrade lets EOAs use smart wallet features like gasless USDC transactions—no smart contract deployment needed. See how it works.
One of the most persistent challenges in blockchain-based payments is the poor user experience around gas fees. For users who just want to send or spend USDC, the need to acquire and manage native gas tokens like ETH is a major blocker. It’s a confusing and unnecessary hurdle, especially for new users.
Account Abstraction and Smart Contract Wallets have been touted as the answer: they allow transactions to be sponsored, enable custom signing logic, and support advanced features like session keys and social recovery. But there's always been a catch - users need to deploy a smart contract account to access these benefits. That deployment still costs native gas.
Enter EIP-7702.
The Problem: EOAs Are Stuck in the Past
Ethereum’s default account type, the Externally-Owned Account (EOA), is lightweight but extremely limited. EOAs can’t delegate calls, batch transactions, or pay gas in anything other than the chain’s native token. That’s why most gasless UX enhancements require users to migrate to a Smart Contract Wallet.
This isn’t just a developer problem. It’s a friction point that makes onboarding users to payments with USDC more difficult. Want to cover gas fees on their behalf? You need to spin up a smart wallet first. Want to let them pay gas in USDC directly? Same issue.
The Breakthrough: EIP-7702 + Circle Paymaster
With the upcoming Pectra Upgrade, Ethereum introduces EIP-7702, a game-changing proposal that enables EOAs to temporarily assume the behavior of Smart Contract Accounts. It adds a new transaction type where an EOA can point to a contract implementation (like a wallet kernel or delegation module) for the duration of a transaction.
Here’s what that means for USDC and Circle Paymaster:
EOAs can submit UserOperations (UserOps) just like Smart Contract Accounts.
Circle Paymaster can enable these transactions to be executed, allowing gas to be paid using USDC instead of native tokens.
No smart wallet deployment is required.
Users can transact instantly with USDC from the moment they create an EOA.
This unlocks a radically smoother user experience: open your wallet, receive USDC, and start sending or spending—all without touching native gas.
How It Works
When the Pectra Upgrade activates, a standard EOA can include a delegation signature in its transaction to temporarily hand off execution to a smart contract. This delegated contract enables the EOA to sign and submit ERC-4337-style UserOps, the same kind of operations that smart wallets use to batch transactions and pay gas with alternative tokens.
Circle Paymaster, already live on testnets and in production for supported chains, can evaluate these UserOps, determine that the sender has enough USDC, and pay the gas on their behalf. All of this happens behind the scenes, turning the gas UX into something delightfully invisible.
Here’s what’s possible now:
- USDC-first onboarding – Fund a new wallet with USDC and start transacting immediately.
- Frictionless dApp flows – Remove token swap steps just to pay gas.
- Simplified developer integration – No need to deploy smart accounts or manage EOA-to-SCW transitions.
- Global inclusivity – Onboard users who don’t have access to native tokens or exchanges.
Why This Matters
At Circle, we believe payments should be fast, global, and easy. But the blockchain UX today doesn’t reflect that reality. EIP-7702 brings us a major step closer.
With just an EOA and some USDC, users can:
- Transact in dApps
- Send money to friends
- Onboard to DeFi
- Pay for goods or services
…without ever needing to buy or manage a chain’s gas token.
That’s real utility. And that’s what will help make USDC mainstream.
What’s Next?
The best part? No changes are needed to Circle Paymaster. EIP-7702-compatible EOAs can start using it once the Pectra Upgrade goes live. Developers won’t need to deploy smart wallets or update existing paymaster integrations.
If you're building with USDC and focused on reducing user onboarding friction, this is your moment. EIP-7702 turns every EOA into a capable, gas-abstracted account, bringing us one step closer to making USDC just work.
