Circle made a plumbing change to Gateway that fixes a wallet compatibility problem around USDC. Until now, the service expected the kind of signature you get from a standard wallet with one private key.
Smart-contract wallets work differently, and that meant some of them could not pass Gateway’s burn-intent verification. Circle has now added ERC-1271 support, which means those smart wallets can be recognized by Gateway instead of getting shut out by the older signature check.
In plain English: newer wallet designs now work with a part of Circle’s USDC infrastructure that used to favor older account models. If more crypto apps are built around smart-contract wallets, core stablecoin rails have to support them, or users and builders run into friction fast.