Circle’s new nanopayments system aims to remove blockchain fee barriers, allowing developers to charge extremely small amounts for digital services and automated transactions.
Circle has launched a new ‘nanopayments’ capability on testnet designed to make extremely small digital payments viable without transaction fees outweighing the payment itself.
The feature, unveiled this week by Blessing Adesiji, Developer Relations Manager (EMEA) at Circle, aims to address a longstanding problem in blockchain payments: the cost of processing a transaction can sometimes be higher than the value being transferred.
On most blockchain networks, every transaction requires a processing fee known as “gas”. While these fees are often small, they can become a major barrier when payments are only fractions of a cent.
In a post on X, Adesiji illustrated the issue. Charging $0.01 for an API call may seem reasonable, but if the fee to process that payment is $0.005, half the revenue disappears into infrastructure costs. If the payment falls to $0.001, the economics no longer work at all.
“The payment literally costs more than the service itself,” Adesiji wrote, arguing that this has prevented pay-per-use pricing models from scaling on public blockchains.
Reducing the cost of very small payments
Circle’s approach is to avoid settling every payment individually on the blockchain. Instead, the company groups large numbers of small payments together and settles them at the same time. By sharing the network fee across thousands of transactions, the cost per payment falls dramatically.
Under the system, users first deposit USD Coin into what Circle calls a “gateway wallet”. This initial deposit is the only point where the blockchain transaction fee is paid.
After that, individual payments are authorised digitally but are not immediately recorded on the blockchain. Circle’s infrastructure collects these payment authorisations and settles them later in large batches.
According to Circle, 1,000 payments that might otherwise cost around $10 in total network fees could instead be settled for about $0.01. That reduces the cost per payment to roughly $0.00001.
For developers integrating the system, the process is designed to work within a typical web interaction. A service requests payment, the user approves it digitally, and the service is delivered immediately. The underlying settlement happens later as part of a larger batch of transactions.
Why nanopayments matter
The broader significance of the technology lies in the types of business models it could enable.
Charging users based on precise usage – such as per API call, per second of streaming, or per piece of data accessed – has long been seen as a natural way to price digital services. However, this model has been difficult to implement on blockchains because transaction fees can quickly outweigh the value of the payment itself.
By reducing the cost of individual payments to a fraction of a cent, Circle is attempting to make these models more practical.
The company points to several potential use cases, including charging small amounts for access to data, software services or digital content. It also highlights the possibility of machines and software systems making payments automatically to access computing resources or other services.
This is particularly relevant as interest grows in so-called “agentic” systems, where AI tools can operate independently and purchase services such as computing power or data without human involvement.
In these scenarios, systems may need to make thousands of very small payments in rapid succession. If each payment carries a meaningful transaction fee, the model becomes impractical.
Part of a broader stablecoin strategy
The launch also reflects Circle’s wider effort to position USD Coin not only as a digital dollar for trading or payments, but as infrastructure for programmable financial services.
Over the past several years, Circle has expanded the role of USDC beyond cryptocurrency markets into areas such as cross-border settlement, digital treasury management and blockchain-based payment systems.
Nanopayments represent another step in that strategy, targeting developers building new digital services and automated payment systems.
If successful, the technology could open new types of transactions that traditional payment networks are not well designed to handle, particularly when payments need to be extremely small and extremely frequent.
