Circle Launches Arc Blockchain With USDC as Native Gas Token

Circle, the issuer of the U.S. Dollar Coin (USDC), has introduced Arc, a new Layer-1 blockchain designed to support the next generation of stablecoin-native financial applications. The blockchain features USDC as its native gas token, enabling users to pay for transaction fees in the stablecoin and offering predictable, dollar-denominated costs. This innovation aims to resolve challenges faced by financial institutions and fintechs, such as volatile transaction fees and the complexity of managing cross-chain liquidity [1][2][3].

Arc is fully compatible with the Ethereum Virtual Machine (EVM), allowing developers to deploy Ethereum-based tools and frameworks on the new blockchain. It includes a built-in foreign exchange (FX) engine that supports institutional-grade RFQ systems and 24/7 peer-to-peer (PvP) settlements. The platform also provides sub-second transaction finality through its consensus engine, Malachite, developed in collaboration with Informal Systems, a company specializing in formal verification and Byzantine Fault Tolerance [4][5].

The blockchain is engineered to support stablecoin finance through a unique architecture that integrates key components of Circle’s ecosystem, including the Circle Payments Network (CPN), Mint, Wallets, and Contracts. It offers selective privacy for transactions and balances, ensuring compliance with institutional requirements while maintaining openness and composability. Arc is envisioned as a central hub for a range of stablecoin-based innovations, including tokenized equities, commodities, and onchain credit and capital market settlements [6][7].

The launch of Arc follows a period of significant growth for Circle. In Q2 2025, the company reported a 53% year-over-year increase in revenue, reaching $658 million, along with a 90% year-over-year rise in USDC circulation to $61.3 billion. However, it also incurred a net loss of $428 million during the same period, underscoring the substantial investment in infrastructure development [8].

Circle has emphasized that Arc is an open and composable platform, inviting developers and enterprises to build, transact, and innovate. The core software will be released under a permissive open-source license to encourage community participation and transparency. Arc is expected to launch a private testnet in the coming weeks, with a public testnet planned for the fall and a mainnet beta scheduled for 2026 [9][10].

The strategic vision for Arc includes supporting cross-border payments, stablecoin perpetual futures markets, onchain credit with offchain trust signals, tokenized collateral, and agentic commerce systems. The platform is designed to integrate seamlessly with traditional financial systems while adhering to the principles of decentralization and transparency [11].

The introduction of Arc marks a pivotal development in the evolution of stablecoin-based finance. By creating a blockchain infrastructure specifically optimized for stablecoins, Circle is addressing the limitations of existing public blockchains and positioning itself as a central player in the next wave of digital finance. The initiative aligns with the broader industry trend toward the tokenization of real-world assets and the expansion of onchain financial infrastructure.

Source:

[1] https://news.bitcoin.com/circle-unveils-arc-blockchain-with-usdc-as-native-gas/

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

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

[4] https://www.circle.com/blog/introducing-arc-an-open-layer-1-blockchain-purpose-built-for-stablecoin-finance

[6] https://cointelegraph.com/news/usdc-issuer-circle-layer-1-blockchain-arc

[7] https://www.ainvest.com/news/circle-launches-arc-blockchain-power-usdc-based-financial-infrastructure-2508/

[8] https://www.techmeme.com/250812/p12