Proposal for USDC Sufficiency on Polkadot Asset Hub

Circle is a global financial technology firm and the issuer of USDC. USDC is a fully reserved digital dollar, also known as a stablecoin that’s 100% backed by highly liquid cash and cash-equivalent assets, and is always redeemable 1:1 for US dollars. USDC is one of the largest and most widely used stablecoins in Web3 with over $25B in circulation as of October 2nd, 2023.

Circle publishes weekly breakdowns and monthly attestations of the USDC reserve (see here), and its financial statements undergo annual audits. Circle has registered USDC on Polkadot Asset Hub (Asset ID 1337), which can be verified here.

Circle is requesting Polkadot Relay Chain governance to make USDC sufficient on Polkadot, so that USDC can be used to pay transaction fees and exist on accounts without DOT. Circle is excited to be working with the Polkadot ecosystem because of the broad reach and growth potential of XCM, the security assurances from Polkadot validators, and the increasing developer traction within the Polkadot community.

Assets on Polkadot can be Sufficient or Non-Sufficient. To hold a Non-Sufficient asset in a Polkadot Asset Hub wallet address, a corresponding Polkadot Asset Hub account needs to exist on-chain. This is different from other chains, where a wallet address can hold other tokens by default. On Polkadot Asset Hub, users need to ensure that the receiving wallet address holds at least 0.1 DOT, which is the Existential Deposit for establishing a Polkadot Asset Hub account, prior to sending additional assets to the address. However, Sufficient assets can also establish a Polkadot Asset Hub account, such that the Existential Deposit in DOT is not necessary. Circle is requesting this property of sufficiency for USDC to be voted on by Polkadot Relay Chain governance.

This sufficiency proposal can make it easier for Polkadot to attract mainstream users, who would be able to use USDC to directly pay gas and execute transactions on Polkadot. Simplifying user experience and expanding access to USDC liquidity can help developers onboard more users and bring new use cases to the Polkadot ecosystem. Ultimately, sufficiency for USDC can improve accessibility and help the ecosystem grow and attract future projects.