Circle launches Paymaster to pay gas fees in USDC

Circle launched a new on-chain utility that allows users to pay for gas fees with USDC on Arbitrum and Base
Developers can use Paymaster to streamline gas payments within their applications
Paymaster charges 10% of the gas fee, but is free until June 30 2025

Circle announced the launch of a new permissionless service, called Paymaster, that allows users to pay transaction fees in USDC for applications on the Arbitrum and Base networks.

Paymaster allows developers to integrate its features into their applications to provide a smooth process for users.

Introducing Circle Paymaster, enabling users to pay gas fees with USDC on @arbitrum and @base.

No more juggling tokens across blockchains—simply use USDC for payments, transfers, and gas fees.

Learn more: https://t.co/QHArlEhAJC pic.twitter.com/o3mKWLvyJR

— Circle (@circle) January 23, 2025

How Paymaster works

According to Circle’s blog post, Paymaster maintains balances of native coins used for gas (presently ETH on Arbitrum and Base), accepts USDC payments, and then pays using the native gas coin on the backend.

The application then rebalances its reserve of native gas coins.

While the service’s availability is currently limited to accounts controlled by smart contracts, Circle plans to expand to externally owned accounts (accounts owned by private keys) after the Ethereum Pectra upgrade.

Circle also plans to expand Paymaster to the Ethereum main net, Polygon, and Solana networks. This will enable users to pay transaction fees on multiple blockchains from a single blockchain.