Why Now Is the Best Time to Transition from USDT to USDC

The recent rebrand of EPUSDT to GM Pay is more than a name change. It is a strategic shift toward a more open, compliant, and payment-ready stablecoin future. GM Pay is preparing to support more of the @arc ** **ecosystem, as well as @USDC and $EURC, fully embracing the @circle ecosystem as the foundation for the next generation of onchain payments.

Arc@arc·Oct 28, 2025Arc Public Testnet is now live.

Open to developers and enterprises globally, Arc is the Economic OS for the internet that unites programmable money and onchain innovation with real-world economic activity.

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This transition matters because stablecoins are no longer just trading tools. They are becoming payment rails, treasury tools, settlement layers, and financial infrastructure for businesses around the world. In that environment, the question is no longer simply, “Which stablecoin has the most liquidity today?” The better question is, ‘Which** stablecoin can become the safest, most compliant, most interoperable, and most widely accepted standard for global payments tomorrow?’**

For GM Pay, the answer is increasingly clear: now is the best time to transition from USDT to USDC.

DD 滴滴./@rtk17025·9hReplying to @rtk17025 @GMWallet and 2 othersYou also can check the threads on arc house

1. A demonstration for using GM PAY on arc testnet

https://community.arc.io/home/clubs/agentic-economy-dofua/forum/boards/agentic-economy-72a/posts/a-demonstration-for-using-gm-pay-on-arc-testnet-hv2k3ghvat?focusVoter=true…

2. Running arc on GM PAY

https://community.arc.io/home/clubs/agentic-economy-dofua/forum/boards/agentic-economy-72a/posts/running-arc-on-gm-pay-godn4lumo8?focusVoter=true…Arc House | Build the economic OS for the internet with usFrom community.arc.io15521

1. User protection: USDC is a clearer 1:1 digital dollar; USDT is a more complex reserve portfolio

The first reason is user protection.

USDC is designed as a fully backed digital dollar. Circle states that USDC is 100% backed by highly liquid cash and cash-equivalent assets, and that it publishes monthly reserve attestations by a Big Four accounting firm. (Circle) Circle’s MiCA white paper also states that USDC is fully backed by an equivalent amount of USD-denominated assets, with reserves held separately from corporate funds for EEA holders and independently reviewed monthly. (Circle)

USDC offers a 1:1 ratio of US dollar assets and extremely high transparency in reserve information.

USDC offers a 1:1 ratio of US dollar assets and extremely high transparency in reserve information.

USDT is different. Tether states that USDT is pegged 1:1 and backed by Tether’s reserves, and its latest Q1 2026 disclosure reported assets exceeding liabilities. (Tether) But those reserves are not simply cash or short-term Treasury bills. Tether’s own Q1 2026 announcement says its reserves included about 20 billion of physical gold** and about **7 billion of Bitcoin, alongside approximately $141 billion of direct and indirect U.S. Treasury bill exposure. (tether.io)

The above picture presents the extremely complex balance sheet of USDT.

The above picture presents the extremely complex balance sheet of USDT.

That difference matters. If a user holds a stablecoin for payments, they are not trying to take exposure to gold, Bitcoin, secured lending, corporate credit, or opaque balance-sheet decisions. They want one thing: a dollar-equivalent instrument that behaves like a dollar.

The unfairness is simple. USDT holders do not receive the upside from Tether’s reserve income, Bitcoin gains, or gold gains. But if those assets fall sharply, users may still be exposed to confidence, liquidity, and redemption risk. That is not an ideal model for payment infrastructure. A payment user should not have to worry about whether gold goes down, Bitcoin goes down, or whether a private company’s reserve portfolio remains strong enough during market stress.

USDC is not risk-free; no privately issued stablecoin is. But its reserve model is easier for users, businesses, regulators, and payment providers to understand. For payments, simplicity is protection.

2. Global payment infrastructure needs one accepted standard, and USDC has the stronger compliance path

The second reason is acceptance.

A payment network only works when both sides can use the same standard. Merchants, enterprises, fintechs, and institutions do not want to explain to their legal teams why a payment token is difficult to use in Europe or why it may not meet local regulatory expectations. They want a stablecoin that can pass compliance review, accounting review, and partner due diligence.

This is where USDC has a major advantage.

The EU’s MiCA framework creates uniform rules for crypto-assets, including transparency, disclosure, authorization, and supervision requirements for issuers and trading of e-money tokens and asset-referenced tokens. (ESMA) Circle announced in July 2024 that its French entity became the first global stablecoin issuer to achieve MiCA compliance, with both USDC and EURC issued in the EU under MiCA obligations. (Circle) Circle’s own EEA page states that USDC and EURC are MiCA-compliant stablecoins. (Circle)

Jeremy Allaire - jerallaire.arc@jerallaire·Jul 1, 2024BREAKING NEWS: @Circle announces that USDC and EURC are now available under new EU stablecoin laws; Circle is the first global stablecoin issuer to be compliant with MiCA. Circle is now natively issuing both USDC and EURC to European customers effective July 1st.

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This is not just a regulatory headline. It directly affects adoption. Reuters reported that Coinbase planned to restrict services in the European Economic Area for stablecoins that did not meet MiCA requirements and would offer users options to switch to authorized issuers such as Circle’s USDC and EURC. (Reuters)

Due to the compliance issues of USDT, it is difficult for European enterprises to adopt cryptocurrency payment methods.

Due to the compliance issues of USDT, it is difficult for European enterprises to adopt cryptocurrency payment methods.

This matches what many European businesses have already told us: one of the main reasons they could not use EPUSDT was not product design, but legal uncertainty around USDT. A payment tool that cannot be comfortably used by regulated businesses in Europe cannot become a truly global standard.

USDC and EURC solve this problem better. USDC provides a regulated digital dollar. EURC provides a regulated euro stablecoin. Together, they make it easier for global merchants, European companies, wallets, and payment providers to adopt one unified framework without constantly fighting compliance friction.

For GM Pay, this is critical. We are not building only for crypto-native users. We are building payment infrastructure for real businesses, real users, and real cross-border use cases. That requires a stablecoin standard that can travel across jurisdictions.

3. USDC has stronger execution in cross-chain liquidity and developer infrastructure

The third reason is execution.

A payment stablecoin cannot be trapped on one chain. It must move across networks with minimal loss, minimal friction, and minimal liquidity fragmentation. Circle understood this early.

Circle’s Cross-Chain Transfer Protocol, or CCTP, enables USDC to move natively 1:1 between blockchains, using a burn-and-mint process that unifies liquidity and avoids the need for large liquidity pools or separate bridged versions of USDC. (Circle) Chainlink CCIP also supports native USDC transfers when both source and destination chains support Circle’s CCTP, allowing developers to build more secure cross-chain payment and settlement flows. (Chainlink Documentation)

This is a major advantage. With CCTP, USDC is not merely “bridged.” It is natively moved. That means cleaner accounting, less fragmentation, and a better user experience.

USDT has moved later toward a similar idea through USDT0 and LayerZero. Tether announced a strategic investment in LayerZero Labs in February 2026, noting that LayerZero infrastructure had been used to bring USDt0 and XAUt0 to market. (tether.io) Tether’s Wallet Development Kit documentation also describes USDT0 bridging as using the LayerZero protocol across supported networks. (Wallet Development Kit)

USDT0 is an important improvement, but it arrived after years of liquidity fragmentation across chains. It also depends on LayerZero’s cross-chain messaging and OFT architecture. LayerZero’s own documentation describes OFT transfers as relying on LayerZero messaging, directional channel configuration, paired contracts, admin/delegate roles, DVN settings, and executors. (LayerZero) That may be powerful, but it also introduces more configuration and infrastructure assumptions than a stablecoin issuer’s own native burn-and-mint system.

For payment infrastructure, fewer assumptions are better. The more direct the issuance, redemption, and cross-chain movement model is, the easier it is to build reliable consumer and merchant experiences.

USDC’s approach is cleaner, earlier, and more aligned with what payment systems need: unified liquidity, native movement, and predictable developer primitives.

4. The future is Arc: USDC-native payments without the gas barrier

The fourth reason is the future.

Circle is not only issuing USDC and EURC. It is building the infrastructure layer around them. Arc is the most important example.

Circle launched the Arc public testnet on October 28, 2025, describing Arc as an open Layer-1 blockchain designed for developers and enterprises bringing economic activity onchain. Circle says Arc is built for use cases such as lending, capital markets, FX, and global payments, with predictable dollar-based fees, sub-second finality, opt-in configurable privacy, and direct integration with Circle’s platform. (Circle)

Most importantly for payments, Arc uses USDC as the native gas asset. Arc documentation states that USDC is the native EVM asset on Arc and is used for gas fees; testnet USDC is required to pay for gas and interact with contracts. (Arc Docs) Arc also supports EURC natively for payments, FX, and other financial applications. (Arc Docs)

This changes the user experience completely.

Today, many onchain payment products still force users to understand gas tokens. A user wants to pay $50, but first they need ETH, SOL, TRX, MATIC, or another chain-specific token. That is not how normal payments work. Nobody wants to buy a separate “bank transfer fuel token” before sending money.

Arc points to a better model. If USDC is the gas asset, the user can think in dollars from beginning to end. The app can show a transfer fee directly in USD terms. Sending money becomes closer to a bank transfer: amount, recipient, fee, confirm. No gas confusion. No extra token. No unnecessary friction.

That is exactly the kind of infrastructure GM Pay wants to support. GM Wallet will actively support the Arc ecosystem and has already started integrating the Arc testnet. The goal is to make stablecoin payments feel less like crypto and more like modern financial infrastructure: fast, transparent, low-cost, and easy to understand.

Conclusion: The stablecoin standard is shifting

USDT helped build the early stablecoin economy. It still has enormous liquidity and market share. But the next phase of stablecoins is not only about trading volume. It is about payments, compliance, interoperability, user protection, and institutional trust.

That is why now is the right time to transition from USDT to USDC.

USDC offers a clearer reserve model. It has stronger regulatory acceptance, especially in Europe. It has better native cross-chain infrastructure through CCTP and integrations such as Chainlink CCIP. And with Arc, Circle is building a USDC-native payment chain that can remove one of the biggest barriers in crypto payments: gas complexity.

GM Pay’s transition is therefore not just a product update. It is a statement about where onchain payments are going.

The future of stablecoin payments should be simple, compliant, global, and user-first. That future is increasingly being built around USDC, EURC, and Arc.