Why is Circle Making Its Own Blockchain?

The blockchain ecosystem is evolving rapidly, and one of the latest major moves comes from Circle, the issuer of the popular stablecoin USDC.

According to reports from BlockBeats, Circle has introduced Arc, a proprietary blockchain settlement network, while payments giant Stripe revealed Tempo, a chain developed in collaboration with Paradigm.

This signals a new era in the digital payments and stablecoin space, where companies no longer solely rely on public blockchains like Ethereum, Tron, or Solana.

Instead, they are launching new blockchains tailored for speed, compliance, and strategic control.

Why Circle’s New Plan Matters

Circle’s new plan to build Arc represents a fundamental shift in how stablecoin settlements could function. Instead of depending on external blockchains, Circle can now:

1. Control Settlement Infrastructure: By embedding compliance, foreign exchange engines, and predictable fee structures directly at the protocol level.

2. Lower Reliance on External Networks: This move helps reduce exposure to unpredictable gas fees and governance decisions from public blockchains.

3. Enhance Compliance & Interoperability: Arc allows Circle to integrate know-your-customer (KYC) and anti-money laundering (AML) requirements more effectively.

4. The goal is clear: Circle wants to transform USDC into a faster, more efficient payment medium while maintaining strong regulatory alignment.

Read Also: Japan’s First Stablecoin: Why Circle Is Involved

The Bigger Trend: New Blockchains for Stablecoins and Tokenized Assets

Circle and Stripe are not alone in this shift. A wave of projects is following a similar path:

1. Plasma and Stable have raised funding to create dedicated chains for USDT, the world’s largest stablecoin.

2. Securitize and Ethena are developing Converge, focusing on tokenized assets.

3. Ondo Finance announced plans for its own blockchain earlier this year.

4. Dinari is preparing an Avalanche-powered layer-1 network to clear and settle tokenized stocks.

This surge shows that the industry is moving toward specialized infrastructures designed for stablecoins, tokenized stocks, and real-world assets.

Strategic Motivations Behind Custom Blockchains

According to Martin Burgherr of crypto bank Sygnum, creating proprietary blockchains is about more than just speed, it’s about strategic positioning.

Key advantages include:

1. Predictable Fees: Issuers can set their own transaction costs.

2. Network Control: Isolating performance from unrelated blockchain activity.

3. Revenue Generation: Owning settlement infrastructure could generate more income than traditional payment rails.

4. Institutional Trust: Embedding compliance and operational tools directly into the blockchain increases appeal for financial institutions.

Morgan Krupetsky from Ava Labs explained that blockchains are increasingly serving as the “middle and back office” of finance. Meanwhile, Guillaume Poncin from Alchemy highlighted the revenue opportunities of controlling settlement rails.

Read Also: Stripes Partners with Paradigm! What Are They Building?

Market Impact on Ethereum, Solana, and Other Networks

While these new blockchains aim for efficiency, they pose different levels of competitive pressure.

Solana may feel more direct competition, given its positioning as a high-speed, low-cost payment chain.

Ethereum, often considered the “Fort Knox” of blockchain by Burgherr, is less threatened in the short term due to its established institutional trust and security record.

Importantly, most of these new blockchains remain Ethereum Virtual Machine (EVM)-compatible, ensuring they can integrate with existing infrastructure while developing unique settlement layers.

The Road Ahead for Circle and USDC

Circle’s new plan with Arc is not just about creating a blockchain, it’s about reshaping the future of digital payments, stablecoins, and tokenized assets.

With USDC as its flagship product, Circle is positioning itself as a leader in the stablecoin economy, which many analysts project to grow into a multi-trillion-dollar asset class in the coming years.

The move underscores a broader industry transformation: major players no longer want to rent infrastructure, they want to own it.

Read Also: Stripe Acquires Privy, Crypto-Based Financial Services

Conclusion

The rise of new blockchains from Circle, Stripe, and other firms marks a turning point in digital payments and tokenization.

With USDC at the core of Circle’s new plan, the company is signaling its intent to not just participate in the blockchain economy, but to lead it.

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FAQ

What is Circle’s Arc blockchain?

Arc is Circle’s newly announced proprietary blockchain settlement network designed to support USDC transactions with greater speed, compliance, and cost predictability.

Why are companies building their own blockchains?

To reduce dependence on public networks, gain control over fees and governance, embed compliance tools directly, and capture more revenue from settlement operations.

How does this affect Ethereum and Solana?

Ethereum remains dominant for institutional trust, but Solana may face pressure from new high-speed, low-cost competitors.

What role does USDC play in Circle’s new plan?

USDC will be the centerpiece of Circle’s blockchain efforts, aiming to make it the preferred stablecoin for payments and tokenized asset settlements.

Will these new blockchains replace existing networks?

Not immediately. Building trust and liquidity takes time, but these blockchains will likely complement and, in some areas, compete with established networks.