We are so excited to share the news that the Centre Consortium today unveiled a major new upgrade to USD Coin (USDC) that significantly improves usability and security. Today's update comes at a time when USDC has punched through 1.4 billion market cap solidifying its position as the fastest growing regulated fully-reserved digital dollar stablecoin in the world.
Let's get into specifics. First and foremost, USDC 2.0 enables developers of digital wallets to remove "gas fees" associated with transactions on the Ethereum network. To date, users of most digital wallets supporting USDC (an Ethereum ERC-20 token) have been required to purchase and hold a balance of ether (ETH) to pay these fees to settle transactions, creating an enormous barrier to mainstream adoption and broad usage of digital dollar stablecoins for internet payments. USDC 2.0 introduces "gasless sends," which enables wallet developers to remove this complexity from the user experience and either pay for the fees on behalf of customers or present/deduct these fees in USDC instead of ETH. Now the experience of using USDC in digital wallets will be much closer to the mainstream mobile payment apps used everyday by hundreds of millions of consumers around the world.
The second major change is USDC 2.0 introduces a new set of on-chain multiple-signature contracts, including new consensus mechanisms, which will help to improve the resiliency and growth of Centre and shift off-line human processes into on-chain multiple signature processes. Administrative operations can be managed on-chain versus manual off-chain processes, which improves security, auditability and in turn resilience. By using an M-of-N multiple signature model, these improvements also anticipate growth in Centre with more members, including issuing members who would participate in operational flows using on-chain tasks.
Finally, it's very important to note that these updates are completely backwards compatible and there is no impact or change to wallets, exchanges or applications currently integrating with USDC, nor is there any impact or change to existing holders of USDC.
The new USDC smart contract and protocol improvements are available today, August 27th, and any wallet developer can begin to take advantage of gasless sends. Centre members Circle and Coinbase both intend to introduce support for these protocol improvements in their respective products and services, and any 3rd party developer can integrate and support this today using the public USDC smart contract.
To learn and hear more about these developments, tune in to the Money Movement live today at 1:00 PM ET, where product leadership from Circle and Coinbase, including VP of Product at Circle, Joao Reginatto, and Group Product Manager at Coinbase, Nemil Dalal, will join Circle CEO Jeremy Allaire to discuss USDC at 1 Billion, USDC 2.0 and the future of stablecoins.