Circle Acquires Malachite to Build Arc Blockchain Infrastructure

Circle, the issuer of the widely adopted stablecoin USDC, has announced the acquisition of the Malachite consensus engine from Informal Systems, marking a significant step in its strategic push to develop its own blockchain infrastructure. The technology is expected to underpin the Arc L1 blockchain, a new Layer-1 network designed to support high-performance, scalable, and secure stablecoin-based financial systems [1].

The acquisition includes Malachite’s technology, intellectual property, and the transfer of nine employees from Informal Systems to Circle, signaling a deep integration of talent and expertise to drive the development of Arc [3]. The press release highlights that the integration of Malachite will enhance the performance, reliability, and security of stablecoin transactions, aligning with Circle’s mission to build accessible and trusted financial infrastructure [2].

Malachite, an open-source consensus engine, will remain available under the Apache 2.0 license to promote innovation and accessibility across the industry. The codebase will continue to receive ongoing support, which is expected to drive the evolution of digital finance standards [1]. The Arc platform is designed with a modular architecture and interoperable solutions to support developers building Web3 payment applications. It is also expected to introduce advanced consensus features, on-chain governance, and stablecoin-enabled service integrations [3].

Informal Systems CEO Ethan Buchman has described the acquisition as a “strong validation” of Malachite and their incubation model. He emphasized that Circle’s adoption of the technology provides a high-impact use case and ensures its contribution to meaningful financial outcomes [1]. As part of the agreement, Informal Systems will continue to support Malachite in other areas and collaborate with ecosystem partners on new blockchain-based infrastructure projects, including those in DeFi, custody, and interoperability [2].

Arc’s testnet operations are planned to begin in 2025, with a focus on refining consensus mechanisms and governance frameworks. The partnership reflects a broader trend in the financial industry toward blockchain systems optimized for financial use, which is expected to help Circle realize its vision for programmable money and international transactions [3].

The move positions Circle to reduce reliance on third-party protocols and gain greater control over the performance, scalability, and security of its stablecoin operations. Analysts have noted that this acquisition strengthens Circle’s technical capabilities and enhances its ability to serve its growing ecosystem [4]. By building its own blockchain, Circle is taking a proactive stance in shaping the future of digital finance.

Sources:

[1] Informal Systems Announces Malachite Acquisition by ... (https://www.prnewswire.com/news-releases/informal-systems-announces-malachite-acquisition-by-circle-to-power-new-arc-blockchain-network-302532317.html)

[2] Circle Acquires Consensus Engine to Support New ... (https://www.pymnts.com/cryptocurrency/2025/circle-acquires-informals-consensus-engine-to-support-new-blockchain-network/)

[3] Circle Acquires Malachite to Power Its Upcoming Arc Blockchain (https://finance.yahoo.com/news/circle-acquires-malachite-power-upcoming-173339925.html)

[4] M&A News: Circle Acquires Malachite from Informal Systems (https://www.tipranks.com/news/ma-news-circle-acquires-malachite-from-informal-systems)