Circle Partners with Polymarket to Bring Native USDC Settlement to Prediction Markets

Circle Internet Group (NYSE: CRCL) — the company behind the USDC stablecoin — has announced a partnership with Polymarket, the world’s largest blockchain-based prediction market platform, that will see the marketplace transition its settlement infrastructure to native USDC issued directly by Circle’s regulated affiliates.

Under the new agreement, Polymarket — which currently employs bridged USDC (USDC.e) on the Polygon network as collateral for trading and settlement — will begin a phased migration to native USDC over the coming months, a move designed to reduce bridge risk, enhance capital efficiency and align settlement standards with regulated dollar-backed infrastructure.

Native USDC is redeemable 1:1 for U.S. dollars via Circle’s regulated entities, and eliminating dependency on bridged versions of the token is expected to improve the safety and reliability of on-chain settlement on Polymarket while making the prediction market more attractive to institutional participants.

What the Partnership Entails

Polymarket’s trading activity — which occurs entirely on Polygon — has traditionally relied on USDC.e, a bridged representation of the USDC stablecoin that introduces cross-chain counterparty and bridge risks due to its reliance on intermediate custody and smart contract bridges.

Circle’s collaboration will:

• Replace bridged USDC.e with native USDC on Polygon as the principal settlement and collateral token.
• Eliminate reliance on bridging mechanics that can introduce security risks and inefficiencies.
• Standardise dollar-denominated settlement across all Polymarket trades, benefiting users and liquidity providers with regulated and easily redeemable stablecoin flows.
• Enhance capital efficiency and institutional alignment, important as prediction markets grow in volume and complexity.

According to Circle’s press announcement, the integration will “provide a more capital efficient, scalable and institutionally aligned settlement standard as Polymarket’s platform continues to grow.”

Shayne Coplan, Polymarket’s founder and CEO, commented that using USDC supports a consistent, dollar-denominated settlement standard that will strengthen the integrity and reliability of the market as participation expands.

Why This Matters

Prediction markets — platforms where users trade contracts on the likelihood of future events — have evolved from niche decentralized finance (DeFi) experiments into significant on-chain financial markets, drawing billions of dollars in trading volume and attention from retail and institutional stakeholders.

However, many of these platforms have historically relied on bridged stablecoin assets to transact and settle trades across blockchain networks, which can introduce:

• Bridge risk due to reliance on intermediated custody models.
• Capital inefficiency when assets must be locked or wrapped across chains.
• Operational friction for institutional users seeking regulated settlement standards.

By integrating Circle’s native USDC — a regulated stablecoin redeemable 1:1 for U.S. dollars — Polymarket can reduce these inefficiencies and enhance confidence in its financial rails. This improvement is particularly crucial as platforms seek to attract deeper liquidity and potentially institutional participants who prioritise regulatory alignment and transparency.

Implications for Prediction Markets

The partnership underscores a broader trend in on-chain financial infrastructure where stablecoins like USDC are becoming foundational settlement layers for sophisticated financial applications beyond simple token transfers. For on-chain prediction markets specifically, this development might:

• Increase trust and reliability among traders and liquidity providers.
• Lower systemic risks associated with cross-chain mechanisms.
• Align closer with traditional financial settlement expectations, easing regulatory scrutiny and institutional integration.
• Encourage more platforms to adopt regulated stablecoin rails, fostering market standardisation.

As prediction markets compete with emerging decentralized exchanges and financial derivatives venues, robust and transparent settlement infrastructure becomes a competitive advantage — particularly in an era of rising regulatory focus on digital assets and on-chain financial products.

Corporate Perspectives

Jeremy Allaire, Co-Founder, Chairman and CEO of Circle, said the collaboration reflects the company’s mission to “enable money and capital to work at the speed of the internet, with delightful consumer experiences,” emphasising that integrating USDC as a settlement layer is part of broader efforts to strengthen on-chain financial markets.

Polymarket’s Shayne Coplan added that adopting native USDC supports “a consistent, dollar-denominated settlement standard that enhances market integrity and reliability,” an important foundation as prediction market activity scales.

Looking Ahead

The transition to native USDC is planned to take place over a phased period in the months ahead, coordinated to minimise disruptions to existing markets and open positions.

If executed successfully, this move could reshape how prediction markets approach settlement and liquidity — potentially setting a settlement standard that other venues may follow as stablecoin infrastructures continue to mature and regulatory expectations tighten.

Analysts believe that as on-chain financial markets diversify beyond simple token swaps into sophisticated derivatives and outcomes-based products, dollar-backed stablecoins like native USDC will become core infrastructure where transparency, efficiency and regulatory alignment are essential.

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