USDC Issuer Circle Unveils Arc, Game-Changing Layer-1 Blockchain for Stablecoin Finance

Circle, the issuer of the USDC stablecoin, has announced the launch of Arc, a new layer-1 blockchain designed specifically for stablecoin payments and tokenized assets.

Built to support regulated financial applications, Arc is compatible with the Ethereum Virtual Machine (EVM) and uses USDC as its native gas token.

This allows the network to offer fast, secure, and privacy-enabled transactions with sub-second settlement times.

The announcement comes alongside Circle’s strong financial performance in 2025 and signals a major step forward in the integration of stablecoins into global finance.

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Key Takeaways

1. Arc is an EVM-compatible blockchain designed for stablecoin finance with USDC as its gas token.

2. The network offers sub-second finality, opt-in privacy, and permissioned proof-of-authority validation.

3. Circle plans a public testnet launch in fall 2025, aiming to expand stablecoin use in regulated environments.

Circle’s Arc Blockchain: A New Foundation for Stablecoin Finance

Arc is purpose-built to meet the needs of stablecoin users and regulated financial institutions. Unlike many general-purpose blockchains, Arc focuses on delivering high performance with regulatory compliance and real-world use cases in mind.

One standout feature is its use of USDC as the native gas token. This removes the volatility risk associated with typical native tokens used for transaction fees, creating a stable and predictable environment for users and businesses alike.

The network guarantees transaction finality in under one second, which is a massive improvement over many existing blockchains where confirmation times can stretch into minutes or longer.

This speed is critical for payments, foreign exchange, capital markets, and other financial services where delays can be costly.

Arc also introduces opt-in privacy controls. This means users can choose to keep their transaction amounts confidential while keeping sender and receiver addresses visible.

This balance helps meet privacy demands without compromising transparency required for regulatory oversight.

Security and governance are handled through a permissioned proof-of-authority (PoA) consensus mechanism.

This allows trusted validators, selected by Circle, to efficiently confirm transactions while maintaining a high level of trust and compliance.

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In the future, Circle plans to evolve the governance model to a permissioned proof-of-stake system that allows broader participation.

All these features position Arc as a reliable and efficient blockchain tailored to the growing stablecoin economy and tokenized asset markets.

Circle’s Financial Growth and Strategic Vision

Circle’s announcement of Arc comes at a time of impressive financial growth for the company. In the second quarter of 2025, Circle reported revenues of $658 million, marking a 53% year-over-year increase.

The circulation of USDC stablecoin also grew substantially, surpassing $61 billion. This reflects expanding adoption by users and institutions around the world.

Despite reporting a net loss of $482 million in the quarter, primarily due to non-cash charges related to its recent initial public offering (IPO), Circle’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 52% year-over-year to $126 million.

These numbers indicate solid operational momentum.

CEO Jeremy Allaire highlighted that Circle’s successful IPO and platform adoption are key milestones for both the company and the broader stablecoin ecosystem.

Circle aims to create a “full-stack platform” for the internet financial system, and Arc is a core part of this vision.

By integrating Arc fully with its existing products and supporting interoperability with dozens of other blockchains, Circle hopes to facilitate a seamless experience for users navigating the growing world of digital finance.

With over 100 financial institutions in its payments network pipeline and multiple payment corridors already active, Circle is well-positioned to drive stablecoin liquidity and applications using Arc’s fast, compliant infrastructure.

Read Also: CRCL Stock Price Analysis – Circle Internet Group (NYSE: CRCL)

What’s Next for Arc and the Stablecoin Ecosystem?

Circle plans to launch the Arc public testnet in the fall of 2025, followed by a mainnet beta release featuring core functionalities like USDC gas fees, sub-second finality, and foreign exchange engine capabilities.

Further upgrades will bring confidential transfers, MEV (miner extractable value) mitigation techniques such as encrypted mempools and batch processing, and a more inclusive governance model.

These developments could make Arc a critical settlement layer for global finance. Its design supports regulated cross-border payments, capital markets activities, and tokenized real-world assets, all areas where speed, privacy, and compliance are paramount.

The rise of Arc also reflects a wider trend in both crypto and traditional finance, where companies are launching blockchains tailored to specific use cases.

Read Also: CRCL Stock Price Prediction 2025-2030: A Comprehensive Analysis

Other players like Stripe and Robinhood have announced blockchain projects focused on tokenization and payment networks, underscoring the growing importance of blockchain technology in everyday finance.

As USDC remains one of the most widely used stablecoins with a market cap exceeding $65 billion, Arc’s integration could accelerate adoption and make stablecoin-based finance more accessible, efficient, and secure.

Conclusion

Circle’s launch of the Arc blockchain is a landmark event in the evolution of stablecoin finance.

By creating an EVM-compatible layer-1 blockchain that uses USDC as its native gas token and offers sub-second transaction finality, privacy options, and regulatory compliance features, Circle is positioning Arc as a foundational infrastructure for the future of digital finance.

As Arc develops and integrates with Circle’s platform, users and businesses will have faster, safer, and more predictable ways to transact with stablecoins across global markets.

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FAQ

What is Circle’s Arc blockchain?

Arc is a new layer-1 blockchain built by Circle, designed specifically for stablecoin finance and tokenized assets with USDC as the native gas token.

How does Arc improve stablecoin transactions?

Arc offers sub-second settlement finality, opt-in privacy, and uses USDC for transaction fees to avoid volatility in gas costs.

When will Arc be available to the public?

Circle plans to launch the Arc public testnet in fall 2025, with a mainnet beta to follow soon after.

What consensus mechanism does Arc use?

Arc uses a permissioned proof-of-authority system for validation, with plans to transition to a permissioned proof-of-stake governance model later.

How does Arc fit into Circle’s broader strategy?

Arc is a core part of Circle’s full-stack platform vision, aiming to enhance stablecoin liquidity and use in regulated financial environments worldwide.

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