Circle Updates CCTP to Enable Prepaid Fees for USDC Transfers

Previously, protocol fees were often deducted from the USDC minted on the destination network, meaning recipients would receive less than the sender originally intended. With the new prepaid model, the CCTP smart contract collects the fee before the USDC burn transaction occurs on the source chain. This process utilizes the Circle Quote API, which bundles Fast Transfer and Forwarding Service charges into a single, time-limited signed quote.

To implement this, applications request a quote that binds the transfer amount to specific network identifiers. The CCTP contract then verifies this quote before passing the transaction to the TokenMessengerV2 to complete the burn-and-mint process. While this functionality currently requires an EVM-compatible source chain—meaning Solana cannot serve as an origin for these specific prepaid transactions—the destination chain can be any network supported by the protocol. By separating the transfer amount from the service costs, Circle aims to provide a more predictable experience for users, allowing them to settle fees in native assets or stablecoins before a transaction leaves the source environment.