Stablecoin giant Circle is planning to roll out native USDC on Hyperliquid’s HyperEVM blockchain, a change that will allow direct minting and redemption of the USD-backed stablecoin on the platform and reduce the need to use wrapped tokens routed through its current Arbitrum bridge.
Hyperliquid’s existing setup moves USDC from Arbitrum via a multi-signature bridge controlled by four validators with a two-thirds quorum, meaning three signers can authorize withdrawals.
While those keys are believed to be stored under secure physical custody, the bridge’s structure has been a focal point of community debate about operational risk.
With native USDC in place, Circle will be able to issue the token directly on Hyperliquid, removing the need for bridging. The company hasn’t said whether the Arbitrum bridge will be shut down.
A spokesperson for Circle declined to elaborate on whether native minting would remove the need for the Arbitrum bridge. The Defiant reached out multiple times to Hyperliquid but received no response.
Bad for Arbitrum
Dylan Bane, senior research analyst at Messari, told The Defiant that Circle minting USDC directly on Hyperliquid “signals that it views the exchange as a credible and growing venue for trading, with the HyperEVM showing strong potential to compete with major L1s and L2s.”
He noted that as Hyperliquid gains market share across both spot and perpetuals markets, Circle appears to be positioning itself early for what it sees as a rising source of stablecoin velocity. “Circle’s institutional credibility in both crypto and TradFi further legitimizes Hyperliquid as a reputable chain, increasing the likelihood of institutional investment in the chain’s token,” Bane said.
On the potential fallout for Arbitrum, Bane warned that native USDC minting on Hyperliquid is “likely to have negative implications.” With nearly 68% of Arbitrum’s USDC TVL currently deployed on Hyperliquid, the removal of bridging requirements would mean that a “significant portion of that liquidity could exit the chain,” the senior analyst said.
ARB Chart
Bane added that Hyperliquid’s dependency on Arbitrum is expected to decline as HyperEVM continues to mature. “Arbitrum’s token fell over 11% since the day of the July 31st announcement, reflecting the market’s belief that Circle’s move weakens Arbitrum’s strategic position.”
As of press time, ARB is trading at $0.3867, down 8.8% over the past seven days, per data from CoinGecko.
Blockchain analysts noted on X that native issuance could mean Hyperliquid “won’t need to store those $5 billion [in bridged] USDC,” which some described as removing “the biggest FUD point” for the network.
