Blockchain developer Circle unveils Arc, a Layer-1 network in the open
Circle, the digital currency company behind the popular stablecoin USDC, has announced the launch of Arc, a high-performance Layer-1 network designed specifically for stablecoin finance. With USDC as the native gas token, Arc aims to revolutionize the stablecoin ecosystem with its unique features and benefits.
Speed and Scalability at the Forefront
One of the key advantages of Arc is its sub-second transaction finality, enabling near-instant settlement of transactions. This speed is crucial for use cases like international remittances, trade settlements, and tokenized financial assets. Furthermore, Arc's high scalability and low latency make it efficient in handling large transaction volumes, even during traffic surges, without the bottlenecks or high fees common in shared networks.
EVM Compatibility and Stablecoin FX Engine
Arc is fully compatible with the Ethereum Virtual Machine (EVM), allowing developers to deploy smart contracts and decentralized applications easily, leveraging existing Ethereum tooling and ecosystem. Additionally, Arc features an integrated stablecoin FX engine, which facilitates efficient currency exchange processes intrinsic to stablecoin transactions and global financial flows.
Enhanced Privacy, Compliance, and Cost Efficiency
Arc offers user-activated optional privacy controls, a rarity in public blockchains. These customizable privacy features are crucial for regulated financial transactions. Moreover, Arc is designed to comply with regulated environments, offering institutional-grade compliance tools that support seamless integration with existing financial systems, thus enabling enterprise adoption. By native use of USDC for transaction fees (gas), Arc streamlines fee payment without requiring a separate native token, enhancing convenience and alignment with stablecoin use cases.
Interoperability and Isolation
Arc is designed to leverage blockchain's global demand with the stability and compliance businesses require. It is interoperable with the broader USDC ecosystem, ensuring seamless asset management across 24+ other networks where USDC is supported, thus expanding liquidity and connectivity. Moreover, Arc is designed to isolate transaction queues, preventing unrelated network activity from impacting stablecoin transactions, maintaining predictable performance and fees.
A Shift in Strategy for Circle
Strategically, Circle views Arc as a foundational infrastructure that shifts its role from just a stablecoin issuer to a full-stack platform provider enabling the “internet financial system.” By controlling the underlying blockchain, Circle aims to optimize security, scalability, and regulatory compliance for stablecoin-powered payments, capital markets, and enterprise finance applications.
Successful Implementation Could Lead to New Milestones
If successfully implemented, Arc could lead to new cryptocurrency milestones. Circle's IPO, completed in June 2025, raised $1.2 billion, and the company's total revenue and reserve income increased 53% year-over-year to $658 million in Q2 2025. Moreover, USDC in circulation grew 90% year-over-year to $61.3 billion in Q2 2025. Circle's stock rose nearly 34% after the Senate passed the GENIUS Act 68-30.
Looking Ahead
Circle has announced that the public testnet for Arc is scheduled for launch later this fall. Once launched, Arc will be integrated into Circle's existing platform and services, further strengthening Circle's position as a leader in the stablecoin market. With its focus on speed, scalability, compliance, privacy, and stablecoin-first economics, Arc is well-suited to support the growing demand for stablecoin-based transactions and to meet regulated financial industry standards.
Technology plays a pivotal role in Arc, a high-performance Layer-1 network designed for stablecoin finance. Its compatibility with the Ethereum Virtual Machine (EVM) allows for the easy deployment of smart contracts and decentralized applications, taking advantage of existing Ethereum tools and ecosystem. Furthermore, the integration of a stablecoin FX engine facilitates efficient currency exchange processes, crucial for stablecoin transactions and global financial flows.
