USDC news

Gravity Bridge, a cross-chain protocol linking Ethereum and Cosmos, was drained of approximately $5.4 million early Saturday in what security researchers suspect was a compromise of signing keys rather than a smart contract bug. The attacker executed unauthorized withdrawals, stealing around $4.3 million in USDC, 274 wrapped ether (~$553,000), $434,000 in tether, and 14.16 PAXG tokens ($64,000). The team halted the bridge and advised validators to stop operations while investigating. The stolen funds were partially laundered through ChangeNow and Binance, with the theft wallet still holding about 2,100 ETH (~$4.23 million). The attack vector appears to involve compromised validator signatures, fitting a broader trend of key-related breaches in 2026 bridges, such as those seen in Kelp DAO and Resolv. Although modest compared to major bridge hacks, the incident adds to a surge in crypto hacks, with bridges remaining a prime target.

Circle froze approximately $12.6 million in USDC after blacklisting the Ethereum contract behind Zama's confidential USDC token, cUSDC, at the request of a U.S. court. The freeze occurred early Saturday morning, locking 12,606,386 USDC. Zama CEO Rand Hindi stated the company was given no warning and described the incident as collateral damage from a legal dispute involving Overnight Finance. The freeze stems from a class action lawsuit filed May 28 against Maxim Ermilov, founder of Overnight Finance. The plaintiffs allege Ermilov diverted over $15 million from a shared treasury, moving about $12.5 million in USDC to Zama's confidential contract. Ermilov disputes the claims, arguing OVN token holders had no right to force a treasury distribution and that the funds were moved to protect privacy. The court issued a temporary restraining order directing Circle to freeze the assets, with a hearing set for June 1. The blacklist affected the entire cUSDC contract, potentially impacting other users. Zama said it will pause cUSDC, cUSDT, and cWETH contracts while investigating and working to restore access for innocent parties. The case raises concerns about centralized freeze powers affecting public smart contracts.

Circle blacklisted the confidential USDC (cUSDC) contract on Ethereum, freezing approximately $12.6 million in funds. The action prevents holders from redeeming cUSDC for standard USDC, raising concerns about issuer control over privacy-focused DeFi protocols. On-chain investigator ZachXBT linked the frozen funds to Overnight Finance, which recently faced a governance dispute. The freeze may be related to suspected illicit activity, but Circle has not publicly explained its decision. The incident highlights the tension between privacy protocols and centralized stablecoin issuers, as innocent cUSDC holders are affected alongside any targeted addresses. Circle retains unilateral power to freeze funds, and the outcome is expected to influence how privacy projects approach building on centrally issued stablecoins.

Trezor has integrated native stablecoin yield functionality into Trezor Suite via Morpho, allowing users to deposit USDT and USDC directly from their hardware wallets without external DeFi applications. The feature uses two Morpho vaults curated by Steakhouse Financial, with yield generated from borrowing demand rather than token incentives. Trezor is the second-largest hardware wallet provider after Ledger, which already offers similar yield features. Stablecoin yield strategies are growing but face scrutiny over risks like smart contract vulnerabilities and centralization. Vitalik Buterin has criticized many yield products as overly dependent on centralized issuers, proposing alternative models aligned with DeFi ethos.

Cash App, operated by Block, Inc., now allows users to send and receive USDC stablecoins on multiple blockchains including Solana, Ethereum, Polygon, and Arbitrum, according to Block's Bitcoin Product Lead Miles Suter. Transfers are made from existing USD balances with no fees or extra setup. The expansion into stablecoins is a significant move for the app, which has 59 million monthly active users and has historically focused on bitcoin. The upgrade comes amid growing interest in stablecoins from banks and payment networks like Visa and Mastercard. Despite the shift, Suter emphasized that bitcoin remains Block's primary focus, calling it 'Money 2.0' while stablecoins serve as a bridge between fiat and bitcoin.

Circle Technology Services has partnered with global cross-border payments platform Nium to connect stablecoin settlement with global payout rails via the Circle Payments Network (CPN). Nium will join CPN as a payout partner, giving financial institutions access to payout infrastructure in over 190 countries and 100 currencies through a single integration. This allows USDC-powered settlement to deliver local currency funds to accounts, wallets, and cards worldwide, reducing the need for fragmented providers and prefunding. The partnership aims to converge traditional and onchain payment rails, offering scalable infrastructure for banks, fintechs, and enterprises. Circle's CPN manages $8.3 billion in annualized transaction volume as of March 31, reflecting growing institutional adoption of USDC. Circle Chief Commercial Officer Kash Razzaghi emphasized that the collaboration extends USDC from a settlement instrument into a complete payments flow, enabling greater speed, transparency, and capital efficiency.

Hyperliquid's partnership with Coinbase and Circle makes USDC the official quote asset on its perpetual futures exchange, with Hyperliquid capturing up to 90% of reserve income from USDC deposits. Analysts say this could generate sustained buying pressure for the HYPE token, defying broader market weakness. Syncracy Capital estimates the deal could channel $135–160 million in annual revenue to Hyperliquid from yield sharing, potentially rising to $300–500 million as deposits grow. This shifts stablecoin profits from issuers to trading platforms. Compass Point analysts warn the arrangement may reduce annual EBITDA at Circle and Coinbase by $60–80 million, and other DeFi protocols may demand similar terms. The deal also signals consolidation around major stablecoins like USDC.

The Clarity Act advanced in a 15-9 markup vote on May 14, with bipartisan compromise language on stablecoin yield that Bernstein analysts say structurally favors Circle. The compromise prohibits paying interest functionally equivalent to a bank deposit on passive balances, but preserves rewards for activities like trading and payments. Bernstein notes Circle does not directly offer passive yield on USDC, instead using distribution arrangements via partners like Coinbase. The legislation cements stablecoins as payment instruments rather than deposit substitutes, protecting Circle's float income model. Total dollar-backed stablecoin supply reached an all-time high of over $300 billion, with USDT and USDC commanding ~97% of supply. Adjusted stablecoin volumes hit ~$15 trillion monthly in April, with USDC's share rising from 41% to 60% year-over-year, driven by spot trading and wallet-to-wallet transactions. Bernstein sees upside in agentic payments, with Circle's x402 protocol handling 112 million transactions and $16 million in payments since May 2025, with USDC covering over 99% of these payments. Circle's ARC blockchain has processed 244 million testnet transactions since its October 2025 launch. Bernstein maintains an Outperform rating and $190 target for Circle, and $330 for Coinbase. The bill still needs to merge Senate Banking and Agriculture versions, pass the full Senate with 60 votes, and reconcile with the House version passed in July 2025. Polymarket gives a 62% chance of passage in 2026. Coinbase CLO Paul Grewal expects passage this summer, while GSR's Joshua Riezman sees a 50/50 chance.

Circle, the issuer of USDC, has unveiled Arc, a purpose-built layer-1 blockchain designed for stablecoin-focused applications. Arc uses USDC for gas fees, offers deterministic finality, and includes opt-in privacy features. Its public testnet launched in October 2025, with mainnet beta expected in 2026. Arc addresses limitations of existing blockchains, such as fee volatility and probabilistic settlement. It features a consensus engine called Malachite, based on Tendermint, and a fee model that smooths costs using a weighted moving average of network demand. The network also includes a built-in FX engine and interoperability tools like CCTP and Gateway. Circle has announced the ARC token, with an initial supply of 10 billion tokens. The token will be used for staking, governance, and as the network transitions to a permissioned proof-of-stake model. In May 2026, Circle raised $222 million in an ARC token presale led by Andreessen Horowitz, with participation from BlackRock and Apollo Funds, at a $3 billion fully diluted valuation.

Layer-1 blockchain developer Solayer has launched a Visa-compatible payment card that allows users to spend USDC balances through in-store, online, and contactless transactions. The card supports ATM withdrawals where available and can be ordered via the Solayer Pay app, with existing users receiving it for free and new users paying a $20 annual activation fee. Solayer Pay, originally launched as Emerald Card in April 2025, initially served 40,000 users across over 100 countries. The launch comes amid a broader trend of crypto companies introducing stablecoin-linked payment cards tied to traditional networks like Visa and Mastercard. Recent developments include OKX's Mastercard card for European users, MetaMask's expanded card rollout in the US, and Visa and Bridge expanding their stablecoin card program to 18 countries. Meanwhile, the stablecoin market has grown to approximately $322.5 billion, with Tether's USDT and Circle's USDC as the leading issuers.