Cross-chain bridges for accountants: two hashes, one movement

Lock-and-mint, burn-and-mint and intent bridges each leave different records on each chain. Here is how to match them and choose a policy.

2026-10-17 · 6 min read

Every bridge transfer produces at least two transactions on two different chains, and they rarely look alike. Your team needs a matching process that pairs both legs, a written policy on whether a bridge is a continuation or a disposal, and a way to tell bridged tokens from native ones.

Three common designs

Lock-and-mint. Rollup canonical bridges are the classic example. When you deposit an ERC-20 token from Ethereum to Arbitrum, the gateway contract on Ethereum holds your tokens in escrow and a matching token is minted on Arbitrum [5]. Going back, the token is burned on Arbitrum and the escrowed tokens are released on Ethereum only after a dispute window has passed [5]. The token you hold on the destination chain is a representation backed by what sits in escrow.

Burn-and-mint. Circle's Cross-Chain Transfer Protocol (CCTP) burns USDC on the source chain and, after Circle's attestation service confirms the burn, mints USDC on the destination chain [1]. Circle offers a fast mode measured in seconds and a standard mode of roughly 15 to 19 minutes for Ethereum and layer-2 networks, and in standard CCTP the fee is deducted from the amount transferred [1]. Because the issuer mints on both ends, you end up holding native USDC, not a wrapped copy.

Liquidity and intent bridges. Across is an example. You deposit into its contract on the origin chain, and an independent relayer pays you on the destination chain from its own capital, later being reimbursed through the protocol's settlement process [4]. Your fee is simply the difference between what you deposited and what you received, made up of a liquidity-provider fee, a relayer fee and sometimes an app fee [4].

The intent design is the one that trips up matching rules. The destination leg comes from a relayer you have never heard of, not from a bridge contract, so it can look like an unexplained receipt unless you link it back to the deposit.

Matching both legs

Treat each bridge movement as a pair: one origin transaction hash and one destination transaction hash, linked by a shared reference in your records. Match on asset, amount net of expected fees, timing, and the recipient address. Expect timing gaps: near-immediate for intent bridges [4], minutes for CCTP [1], and a longer wait for canonical rollup withdrawals [5]. Until both legs are matched, hold the amount in a bridge-in-transit clearing account rather than letting it appear as a disposal on one chain and income on the other.

Gas is separate. Each leg can carry its own network fee on its own chain, paid in that chain's native token, and should be processed under your normal gas policy.

Bridged versus native tokens

Two tokens with the same ticker can be different assets. Circle describes bridged USDC as created by a third party and backed by USDC locked in contracts on another chain, while native USDC is issued by Circle and redeemable 1:1 for dollars [2]. Bridged USDC is also not compatible with CCTP [2]. When native USDC launched on Arbitrum in June 2023, the earlier Ethereum-bridged version was relabelled USDC.e and the two tokens kept different contract addresses [3]. Circle's Bridged USDC Standard also allows a bridged token to be upgraded to native issuance in place, keeping the same contract address [2].

For accounting, map assets by chain and contract address, not by symbol. Bridged and native versions can carry different risks, and some entities treat them as separate assets for valuation and presentation.

Policy choice: continuity or disposal

There is no bridge-specific rule from the IRS or HMRC that we could find as of October 2026, so treatment rests on general principles and your facts. The IRS says moving virtual currency between wallets you own is not taxable, while exchanging it for other property, including another virtual currency, is [7]. HMRC's DeFi guidance turns on whether beneficial ownership passes when tokens are transferred [8]. A bridge that moves the same issuer's asset may look more like a transfer; one that swaps your token for a third party's wrapped claim, or routes through a relayer, may look more like an exchange. Entities typically elect one of two approaches and apply it consistently: basis continuity, or disposal and reacquisition.

Bridge risk

Bridges concentrate large pools of collateral, which makes them targets. In 2022 the FBI attributed the theft of about 620 million dollars in crypto from the Ronin bridge to North Korea-linked hackers; 173,600 ETH and 25.5 million USDC were taken after five of nine validators were affected [6]. When a lock-and-mint bridge's escrow is drained, the bridged tokens on the other chain can lose their backing. That is a valuation and impairment question for holders, not only a security one.

What to do

• Write a bridge policy: continuity or disposal, how fees are treated, and who approves exceptions.
• Record both transaction hashes for every bridge movement and use a clearing account until both legs match.
• Map tokens by chain and contract address so bridged and native versions are never merged.
• Keep a list of the bridges you use, their design, and the issuer behind each bridged token.
• Review bridged-token exposure at period end for backing and depeg risk.
• Confirm tax treatment with an adviser for material flows, since guidance is general rather than bridge-specific.

Sources

1. Cross-Chain Transfer Protocol (Circle)
2. Bridged USDC Standard (Circle)
3. USDC to Come Natively to Arbitrum (Arbitrum Foundation)
4. Fees in the System (Across Protocol)
5. Token bridging (Arbitrum (Offchain Labs))
6. FBI links largest crypto hack ever to North Korean hackers (BleepingComputer)
7. Frequently asked questions on virtual currency transactions (IRS)
8. CRYPTO61620 - Decentralised Finance: Lending and staking: Chargeable Gains: Making a DeFi loan (HMRC)

General information for finance teams, current as of publication. Not legal, tax or accounting advice.

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