On Tuesday, Circle, the issuer of USDC stablecoin, announced the launch of Arc, a new enterprise-grade Layer-1 blockchain purpose-built for stablecoin-native applications.
The company unveiled the project alongside its second-quarter financial results, outlining plans for a public testnet this fall and a mainnet beta in 2026.
According to Circle, Arc will be EVM-compatible, run USDC as its native gas token, and feature tools tailored for payments, foreign exchange, and capital markets.
Circle eyes bigger vision for stablecoin-first chain
For years, stablecoins have been presented as the bridge between traditional finance and blockchain. However, Circle says fintechs, payment service providers, and enterprises have faced recurring challenges with existing blockchain infrastructure.
High volatility in gas fees, siloed liquidity, and data privacy concerns have slowed adoption for mainstream use.
“One truth has become clear: the industry needs blockchain infrastructure purpose-built for stablecoin finance,” Circle stated.
Arc aims to address these gaps with predictable, dollar-denominated fees, a built-in stablecoin FX engine for real-time conversion, and sub-second settlement finality through its Malachite consensus engine.
The blockchain will also offer opt-in privacy so enterprises can meet compliance requirements without sacrificing on-chain utility.
“Arc will be fully integrated across Circle’s platform and services, which will also remain fully available and interoperable with the dozens of other partner blockchains that Circle supports,” the company noted.
Beyond USDC, Arc will support multiple forms of tokenised value — from other fiat-backed stablecoins to tokenised equities, commodities, and real estate.
Circle says this approach will make Arc a “home for all forms of digital money and tokenised value,” enabling businesses to launch and scale stablecoin-based products more efficiently.
Q2 growth and IPO momentum
The Arc announcement comes just months after Circle’s $1.2 billion IPO in June. In Q2, the company saw total revenue and reserve income rise 53 per cent yearly to $658 million.
USDC in circulation grew 90 per cent from the previous year to $61.3 billion, and increased to $65.2 billion by August 10.
Adjusted EBITDA was up 52 per cent year-over-year to $126 million, although the firm reported a net loss of $482 million, mainly due to $591 million in IPO-related non-cash charges, including $424 million in stock-based compensation.
“I’m proud of Circle’s performance in the second quarter, our first as a public company, where we demonstrated sustained growth and adoption of our platform across many use cases,” said Circle co-founder and CEO Jeremy Allaire.
He added, “This is an extraordinary moment for our company and industry, and we are seeing accelerating interest in building on stablecoins and partnering with Circle across every sector of the financial industry.”
The company also underscored the importance of the recently enacted GENIUS Act in the U.S., which sets a federal regulatory framework for payment stablecoins.
“Circle’s long-standing commitment to regulatory compliance was largely codified by the obligations of GENIUS, which strengthens Circle’s position as the leading regulated stablecoin issuer,” the firm said.
Arc is set to enter private testnet in the coming weeks, with public testing in the fall. If successful, the mainnet beta will roll out in 2026, marking one of the most significant blockchain launches in the stablecoin sector.
The launch will also place Circle in direct competition with other stablecoin issuers exploring blockchain infrastructure, including Tether, which is backing stablecoin-centric projects like Stable and Plasma.