Circle has revealed plans to integrate its USDC stablecoin directly into the zkSync ecosystem.

This integration represents a significant advancement in improving liquidity and usability within zkSync, a layer 2 scaling solution for Ethereum (ETH) that utilizes zero-knowledge proofs to enhance efficiency and reduce costs.

According to Circle's recent blog post, "The upcoming introduction of native USDC on zkSync is poised to introduce a new era of seamless transactions and integration opportunities for both developers and institutional users. USDC, issued by Circle, will become native to zkSync and serve as the official USDC for the zkSync ecosystem."

The transition to native support is expected to gradually transition the current liquidity from bridged USDC — originally on Ethereum and transferred to zkSync via the zkSync Era Bridge — to the new native format.

The advantages of native USDC on zkSync include its regulated status, full backing as a stablecoin redeemable 1:1 for U.S. dollars, and facilitation of institutional on- and off-ramps such as Circle Mint for eligible users. Additionally, it will streamline integration into existing decentralized applications (dApps).

The blog clarifies that "Prior to the launch of native USDC, the Ethereum-bridged form of USDC on block explorers like zkSync Era Block Explorer will be renamed USDC.e" to differentiate it from the forthcoming native USDC.

Circle recently collaborated with Solana to introduce USDC and its cross-chain transfer protocol to the Solana blockchain ecosystem.