Circle Launches Arc Blockchain to Expand USDC Utility and Cut Costs

Circle, the issuer of the USD Coin (USDC) stablecoin, has introduced Arc, a new Layer 1 blockchain platform built specifically to support USDC-based transactions and financial applications. Arc is designed to operate as a high-performance, stablecoin-focused infrastructure, leveraging USDC not just as a medium of exchange but as the native gas token for executing transactions and smart contracts. This marks a strategic shift for Circle, positioning it as a key player in blockchain infrastructure while expanding the utility of USDC beyond its role as a stablecoin [1].

The platform is EVM-compatible, ensuring compatibility with a wide range of existing decentralized applications and tools in the Ethereum ecosystem. This design allows developers to deploy and interact with applications on Arc with minimal friction while benefiting from faster, lower-cost transactions compared to traditional Layer 1 blockchains. The blockchain also features sub-second settlement finality and optional privacy controls, making it particularly suitable for institutional users and global enterprises seeking compliance-friendly infrastructure for cross-border payments and capital markets activities [2].

A public testnet for Arc is expected to launch between September and November 2025, marking the first operational phase of the network before the full mainnet deployment. The testnet will provide developers with an opportunity to experiment with the network, test smart contracts, and build applications optimized for USDC-based transactions. This rollout aligns with a period of significant financial activity for Circle, including a 53% year-over-year revenue increase in the second quarter of 2025, although the firm also reported a $428 million loss in the same period due to broader market conditions and macroeconomic pressures [3].

Arc’s architecture is designed to reduce reliance on third-party blockchains like Ethereum or Solana for stablecoin transfers. By creating a dedicated Layer 1 network, Circle aims to offer more predictable transaction costs, higher throughput, and greater stability for developers and institutions focused on payments and financial infrastructure. If successful, Arc could become the preferred settlement layer for merchants, fintech companies, and DeFi platforms seeking a reliable and efficient infrastructure for stablecoin transactions [4].

The launch of Arc reflects Circle’s broader vision to expand the role of USDC across multiple financial use cases. By embedding USDC at the core of its blockchain infrastructure, Circle is reinforcing its influence in the stablecoin ecosystem and potentially setting a new standard for how stablecoin transactions are executed on a global scale. While technical details remain limited at this stage, the company has confirmed that Arc will maintain interoperability with its existing services and other blockchain networks, ensuring a seamless experience for users and developers alike [5].

[1] TheBlock, [https://www.theblock.co/post/366540/circle-stablecoin-focused-evm-compatible-layer-1-blockchain-arc](https://www.theblock.co/post/366540/circle-stablecoin-focused-evm-compatible-layer-1-blockchain-arc)

[2] CryptoDnes.bg, [https://cryptodnes.bg/en/circle-launches-arc-a-new-layer-1-blockchain-for-stablecoin-and-capital-market-infrastructure/](https://cryptodnes.bg/en/circle-launches-arc-a-new-layer-1-blockchain-for-stablecoin-and-capital-market-infrastructure/)

[3] CoinDesk, [https://www.coindesk.com/business/2025/08/12/circle-unveils-layer-1-blockchain-arc-reports-usd428-million-q2-loss](https://www.coindesk.com/business/2025/08/12/circle-unveils-layer-1-blockchain-arc-reports-usd428-million-q2-loss)

[4] CCN.com, [https://www.ccn.com/news/crypto/circle-to-launch-in-house-layer-1-blockchain-arc-as-q2-earnings-reveal-90-usdc-growth/](https://www.ccn.com/news/crypto/circle-to-launch-in-house-layer-1-blockchain-arc-as-q2-earnings-reveal-90-usdc-growth/)

[5] Quasa.io, [https://quasa.io/media/circle-launches-evm-compatible-l1-blockchain-with-usdc-as-gas-token-sets-testnet-for-fall-2025](https://quasa.io/media/circle-launches-evm-compatible-l1-blockchain-with-usdc-as-gas-token-sets-testnet-for-fall-2025)