Circle has unveiled Arc, an EVM-compatible Layer-1 blockchain purpose-built for stablecoin payments, foreign exchange, and capital markets. The network will utilize USDC as its native gas token and will support sub-second settlement stablecoins. It also includes a stablecoin FX engine for currency conversions and opt-in privacy controls for enterprise users. The public testnet is expected to launch this fall, with mainnet deployment to follow. The announcement comes as legislative frameworks such as the GENIUS Act offer fresh clarity for regulated stablecoins, paving the way for deeper integration into traditional finance.
What is Arc? Planned Technical Features
Circle develops the blockchain to deliver speed, interoperability, and compliance for modern finance. As an EVM-compatible Layer-1 blockchain, it will enable developers to migrate or deploy Ethereum smart contracts while using Arc’s payment-optimized tools.
- USDC-native gas token – Transactions will be paid in USDC, removing the need for volatile network tokens.
- Sub-second settlement stablecoins – Targeting finality in under a second for real-time payments, FX trades, and instant remittances.
- Stablecoin FX engine – Built-in conversion for multiple stablecoin denominations to enable efficient cross-border settlement.
- Opt-in privacy controls – Planned confidentiality features for enterprises, without undermining compliance requirements.
Strategic Significance for Circle
Arc moves Circle beyond issuing stablecoins. It becomes a provider of enterprise-grade blockchain infrastructure for global payments, FX, and capital markets. Circle is optimizing the network for regulated stablecoins. This will strengthen its influence over the stablecoin value chain while giving institutions a compliance-ready environment for deployment. Ultimately, it increases Circle’s control of the payment stack.
The Circle Arc blockchain also positions USDC as a default settlement asset in both blockchain-based and regulated finance systems. This puts Circle in competition with Layer-1 networks, Layer-2 scaling solutions, and traditional payment processors entering the digital currency space.
>>> Read more: Ant Group Partners with Circle to Integrate USDC Globally
Regulatory & Legislative Tailwinds
The timing of Circle’s blockchain announcement aligns with favorable U.S. policy developments. The GENIUS Act offers a defined path for compliant stablecoin operations. This regulatory clarity is expected to boost institutional stablecoin adoption, especially in capital markets settlement, cross-border trade finance, and B2B payments.
Beyond the U.S., Circle is also eyeing expansion into jurisdictions with advanced digital asset regulation, including the EU under MiCA, Hong Kong, and Singapore.
Market Timing & Ecosystem Positioning
Arc’s arrival coincides with strong growth in Circle’s core stablecoin business. The company reported USDC circulation growth of 90% year-over-year, reaching approximately $61 billion in Q2 2025. During the same quarter, Circle posted $658 million in revenue, though it recorded a $482 million net loss tied largely to post-IPO accounting charges.
This post-IPO expansion phase gives Circle the funding and market visibility to promote its Arc blockchain as a settlement and infrastructure layer for global finance. It can position the network to capture more stablecoin payment flows, but also serve as a foundation for institutional capital market applications.
Roadmap & Next Steps
A public testnet is scheduled for this fall, with mainnet launch to follow after developer and enterprise testing. Circle plans to support projects focused on stablecoin payments, FX services using the stablecoin FX engine, and enterprise settlement solutions.
The roadmap also includes onboarding payment processors, banks, and fintech partners to accelerate institutional stablecoin adoption.
>>> Read more: Base Network Outage Halts Coinbase’s Layer 2
Arc is both a technical and strategic milestone for Circle. It combines the flexibility of an EVM-compatible Layer-1 blockchain with the trust of regulated stablecoins. The Circle Arc blockchain could become a core settlement layer for payments, trading, and capital market activity. Powered entirely by USDC as the native gas token.
Readers’ frequently asked questions
What is a “testnet” and why does Arc have one before launch?
A testnet is a separate, trial version of a blockchain used to test features without risking real funds. Arc’s testnet lets developers and enterprises try USDC-based payments, FX conversions, and other functions, and report issues before everything goes live on mainnet.
How is paying fees in USDC different from other blockchains?
Most networks require a native token (e.g., ETH or SOL) for fees. Arc will utilize Circle’s native stablecoin USDC to process gas fees. Businesses won’t need to buy or manage a separate token, which can simplify onboarding and operations.
If Arc is built for institutions, will everyday users benefit?
Yes, but indirectly. Apps built on Circle’s Arc blockchain could power faster, lower-cost payments and remittances for consumers, while settlement and fees happen in USDC behind the scenes.
What Is In It For You? Action items you might want to consider
Follow Arc testnet launch and developer updates
Circle’s public testnet for Arc is planned for fall 2025. Developers, fintech teams, and institutional tech leads should monitor official channels for API documentation, integration guides, and bug bounty opportunities to get early hands-on experience.
Analyze USDC as a network fee model
Arc’s design removes the need for a separate token by using USDC for gas fees. Businesses and payment providers should assess how this could streamline onboarding, reduce volatility risks, and simplify accounting processes compared to other blockchain fee models.
Identify enterprise use cases that benefit from Arc
Institutions working in cross-border payments, FX settlement, and capital markets should explore whether Arc’s speed, integrated FX engine, and opt-in privacy features could improve operational efficiency or compliance alignment in their sector.
