Polymarket Bets on Circle: Major USDC Shift to Boost Prediction Markets

Polymarket partners with Circle to switch from bridged USDC.e to native USDC for all settlements. This upgrade enhances security, reduces bridge risk, and signals a push for institutional-grade infrastructure in the fast-growing onchain prediction market space.

What is Polymarket?

Polymarket is a popular website where people can bet on real-world events using cryptocurrency. Think of it as a stock market for predictions. Users trade “contracts” on outcomes like “Who will win the next US election?” or “Will Bitcoin hit $100,000 by July?”. If your prediction is correct, you win money from those who were wrong. It’s built on blockchain technology, specifically the Polygon network, which makes all trades transparent and secure. So far in 2025, billions of dollars worth of predictions have been made on the platform, making it the world’s largest prediction market.

The platform uses stablecoins—cryptocurrencies pegged to the US dollar—as the money for all bets. This ensures the value of your bet doesn’t swing wildly with crypto prices. Until now, Polymarket used a specific type of stablecoin called “bridged USDC.e” on Polygon. But in a big move announced on February 6, 2026, they are teaming up with financial giant Circle to switch to a more secure and direct version called “native USDC.”

Polymarket and Circle Announce Major Partnership

In a significant move for onchain finance, prediction market leader Polymarket has announced a key partnership with Circle, the company behind the USDC stablecoin. The core of the deal is a planned migration of Polymarket’s entire settlement infrastructure. Over the coming months, the platform will transition from using a bridged version of USDC (known as USDC.e) to Circle-issued native USDC for all trading collateral, order placement, and settlements.

Circle’s Co-Founder and CEO, Jeremy Allaire, highlighted the synergy between the two companies: “Polymarket has been at the forefront of innovation in marrying the speed of information with the speed of markets… we bring the utility and speed of USDC to provide the best possible experience for Polymarket users.” For Polymarket, this is a strategic step towards building a more robust and trustworthy platform. Shayne Coplan, Founder and CEO of Polymarket, stated that using native USDC supports “a consistent, dollar-denominated settlement standard that enhances market integrity and reliability.”

This partnership is more than just a technical switch. It represents Polymarket aligning itself with established, regulated financial institutions like Circle, which also works with giants like the Intercontinental Exchange (ICE). The collaboration signals a broader trend of payment stablecoins becoming the trusted settlement layer for a new generation of internet-native financial markets.

Bridged USDC vs. Native USDC: What’s the Difference?

To understand why this partnership is a big deal, you need to know the difference between a bridged stablecoin and a native one. It’s like the difference between an IOU note and real cash.

Bridged USDC.e (The IOU): Currently, Polymarket uses USDC.e on Polygon. This token started its life as native USDC on another blockchain, like Ethereum. To get it onto Polygon, it was “locked” in a bridge contract, and a corresponding “bridged” token (USDC.e) was created on Polygon. It’s a representation of the original asset. While it usually works fine, it adds an extra layer of complexity and risk—the bridge itself could have a vulnerability or be hacked.

Native USDC (Real Cash): Native USDC is issued directly on a blockchain by Circle’s regulated entities. On Polygon, Circle can create and redeem USDC tokens directly, with no bridge in between. Each token is backed one-to-one by real dollars and cash equivalents held in reserve. It’s the direct, official version.

Understanding the Risks of Bridged Assets Smart Contract Risk: The bridge is a piece of code that could contain bugs or be exploited by hackers, potentially leading to loss of funds. Centralization & Trust: Many bridges rely on a small group of validators or a multisig wallet, creating a central point of failure. Redemption Complexity: Converting a bridged asset back to the native form adds steps and potential delays. Liquidity Fragmentation: Bridged versions (USDC.e) and native versions (USDC) can trade at slightly different prices, creating inefficiency. By moving to native USDC, Polymarket cuts out the “middleman” bridge. This simplifies the system, reduces potential points of failure, and provides users with the most direct and secure form of the dollar-pegged stablecoin. Circle calls this a more “capital-efficient and scalable” solution for a growing platform.

Why is Polymarket Switching to Native USDC?

Polymarket’s decision to upgrade its settlement backbone is driven by three main factors: security, compliance, and growth.

First and foremost is security and risk reduction. As mentioned, removing reliance on a cross-chain bridge significantly shrinks the platform’s attack surface. For a platform handling billions in prediction volume, guaranteeing the safety of user collateral is paramount. This move directly enhances market integrity, as CEO Shayne Coplan emphasized.

Second, it’s a step towards regulatory and institutional alignment. Circle is a regulated financial technology company, publicly traded on the NYSE. Using its native stablecoin brings Polymarket’s operations closer to the standards expected in traditional finance. This is crucial as prediction markets walk a fine line between financial innovation and gambling regulations in the eyes of some US states. Partnering with a heavyweight like Circle adds a layer of legitimacy and trust.

Finally, it’s about preparing for scale and new features. Native USDC offers smoother, faster integration with other financial services and chains. It also fuels speculation about Polymarket’s future plans. The platform has previously hinted at a potential native POLY token. A more robust, institution-friendly settlement layer would be a necessary foundation for launching and sustaining a governance or utility token ecosystem. Some analysts even speculate this could pave the way for an application-specific Layer 2 blockchain in the future.

Prediction Market Competition Heats Up in 2026

Polymarket’s infrastructure upgrade comes at a time when the prediction market space is getting crowded. Major crypto exchanges have aggressively entered the arena, seeing it as a new way to engage users.

In December 2025, Gemini launched “Gemini Predictions,” available across all 50 US states. Just a day later, Coinbase announced a prediction market in partnership with Kalshi, Polymarket’s main traditional competitor. More recently, in early 2026, Crypto.com spun out its prediction markets into a standalone platform called “OG.” Even traditional finance and sports betting players like Robinhood and DraftKings rolled out their own markets in 2025.

This influx of well-funded competitors makes Polymarket’s partnership with Circle a smart defensive and offensive move. By strengthening its core infrastructure with the most trusted stablecoin, Polymarket isn’t just fixing a technical detail—it’s building a moat. It’s betting that users and institutional players will prefer a platform with superior, safer settlement rails, especially as questions about insider trading and regulatory scrutiny persist in the broader industry.

What is Circle and What’s Their 2026 USDC Roadmap?

Circle is a giant in the crypto infrastructure world. Publicly traded under the ticker CRCL, it’s best known for issuing USDC, the world’s second-largest stablecoin with a market cap of over $70 billion. But Circle is more than just a stablecoin issuer; it aims to be a full-stack “internet financial platform” with services like global payments and enterprise blockchain solutions.

This partnership with Polymarket fits perfectly into Circle’s broader 2026 strategy for USDC. Earlier this year, Circle’s Chief Technology Officer, Nikhil Chandhok, outlined a roadmap focused on “deepening native support on high-impact networks” and boosting USDC’s interoperability. Polymarket, as a major application on Polygon, represents exactly the kind of “high-impact” use case Circle wants to support natively.

The goal is to make USDC the default, trustless dollar for all onchain activity. By ensuring a major platform like Polymarket uses the native, canonical version of USDC, Circle strengthens the network effect of its stablecoin, making it more useful and liquid across the entire ecosystem. It’s a win-win: Polymarket gets a superior settlement tool, and Circle secures a flagship partner in the booming prediction market vertical.

What Could a POLY Token Look Like?

While not confirmed, rumors of a potential POLY token for the Polymarket ecosystem have circulated for some time. This partnership with Circle provides some clues about what such a token might involve.

If launched, a POLY token would likely function as a governance token, allowing holders to vote on key decisions about the platform’s future—such as which new event markets to create, fee structures, or treasury management. It could also be used for fee discounts, rewarding loyal users who stake or hold POLY. Furthermore, it might play a role in market creation, where users deposit POLY as collateral to start new prediction events on niche topics.

The shift to native USDC creates a cleaner, more auditable financial base for the platform, which is a prerequisite for a successful token launch. A well-designed token could further decentralize the platform, incentivize community participation, and capture the value created by Polymarket’s growing user base. This move with Circle can be seen as laying the essential groundwork for such a future step.

Conclusion: A Stronger Foundation for Onchain Prediction

The collaboration between Polymarket and Circle is a notable milestone for decentralized finance. It moves beyond the “wild west” era of DeFi, where bridged assets and complex hacks were common, toward a more mature phase focused on security, regulatory alignment, and institutional-grade infrastructure.

For Polymarket users, the change will likely be seamless in the front-end experience. Deposits and withdrawals will still work smoothly. But under the hood, their funds will be secured by a more direct and resilient system. This upgrade strengthens Polymarket’s position in the face of fierce competition and sets a new standard for what users should expect from a leading prediction market: not just interesting bets, but a fundamentally sound and secure financial platform. As prediction markets continue to grow as a tool for forecasting and hedging, the quality of their underlying infrastructure will become their most critical asset.