Circle (CRCL) partners with Polymarket for on-chain settlement

Circle Internet Group (CRCL) has partnered with Polymarket, the world's largest prediction market, to support dollar-denominated settlement infrastructure through its native USDC stablecoin.

Polymarket currently utilizes bridged USDC, but will be transitioning in the coming months to native USDC, which is redeemable by Polymarket's users 1:1 for US dollars.

According to Circle, USDC will give Polymarket a more "capital efficient, scalable, and institutionally aligned settlement standard" that will support the platform as it continues to grow.

"The internet financial system driven by Circle platforms has been built to enable money and capital to work at the speed of the internet, with delightful consumer experiences," Circle co-founder and CEO Jeremy Allaire said in a statement.

"Polymarket has been at the forefront of innovation in marrying the speed of information with the speed of markets, and with the partnership we are building, we bring the utility and speed of USDC to provide the best possible experience for Polymarket users."

Circle becomes the latest crypto or crypto-adjacent company to enter the booming predictions market, joining Coinbase Global (COIN) and Robinhood Markets, Inc. (HOOD).

Coinbase announced last month that prediction markets were now live on its platform across all 50 states in the US, allowing users to trade contracts tied to real-world events.

While the company had already been offering the service in select regions, it expanded nationwide through a partnership with Kalshi, which is the largest US regulated prediction market platform.

And Robinhood said last month that since it launched the service at the end of 2024, prediction markets have become the company's "fastest-growing product line by revenue ever," with 11 billion contracts traded by more than 1 million customers.

Roughly $12 billion was traded on Kalshi and Polymarket in December, up more than 400% year-over-year, according to data from Piper Sandler.

Circle said that it is part of "a growing set of established financial and market-infrastructure institutions" helping Polymarket build toward a transparent, institutional-grade prediction market.

“Circle has built some of the most critical infrastructure in crypto, and partnering with them is an important step in strengthening prediction markets,” Polymarket founder and CEO Shayne Coplan said in a statement.

“Using USDC supports a consistent, dollar-denominated settlement standard that enhances market integrity and reliability as participation on the platform continues to grow.”

Shares of Circle surged 13.6% on Friday, but they're down 28.1% to start the year.

Michael Selig, chairman of the US Commodity Futures Trading Commission (CFTC), said in a recent speech that it "is time for clear rules" to be set for the industry "to support the responsible development of event contract markets and the important role they play in the broader financial system."

He noted that prediction markets "operated within the CFTC’s regulatory perimeter for more than two decades," but that the recent explosion in business has led many people to see them "as novel or unsettled."

"That uncertainty has not served our markets well, nor has it served the public interest," Selig said.