Ethereum News Today: Circle Launches Arc Blockchain to Boost USDC Ecosystem Efficiency

Circle, the issuer of USDC, has launched Arc, a new EVM-compatible Layer-1 blockchain designed to optimize stablecoin-based transactions and financial applications [1]. The platform integrates USDC as its native gas token, enabling users to pay transaction fees in dollar-denominated units [2]. This move aims to streamline cost structures for enterprises and institutions operating in the stablecoin ecosystem [3]. The network features sub-second settlement speeds and an integrated stablecoin foreign exchange (FX) engine, supporting use cases such as payments, forex, and capital markets [4].

Arc is designed to be interoperable with other blockchains through Circle’s platform [5], and its public testnet is expected to launch in the fall of 2025 [6]. The blockchain represents a strategic shift for Circle, moving from relying on external chains to building its own infrastructure tailored for stablecoin usage [7]. The platform’s EVM compatibility enhances its appeal by allowing seamless integration with existing Ethereum-based tools and applications [10].

The launch of Arc comes after Circle reported a 53% year-over-year increase in total revenue and reserves during Q2 2025 [7]. Despite a $428 million net loss due to non-cash charges related to its recent IPO, the company’s adjusted EBITDA rose by 52% YoY to $126 million [8]. The earnings highlight strong operational performance in its first quarter as a public company. Circle’s CEO, Jeremy Allaire, emphasized the significance of the platform, stating that the company demonstrated “sustained growth and adoption across a multitude of use cases and with a diverse set of industry-defining partners” in Q2 2025 [11].

The platform is part of a broader industry trend toward the development of specialized EVM-compatible blockchains targeting specific use cases [14]. Arc is positioned to challenge Ethereum and other platforms in the stablecoin and enterprise finance sectors, especially with the simultaneous launch of competing L1s like Stripe’s Tempo [13]. Circle aims to strengthen its dominance in the stablecoin market, where USDC holds a 24% market share and a $65 billion market cap [15]. The company seeks to further establish USDC as a global digital dollar, expanding its influence in both public and private financial ecosystems [16].

Initial governance of Arc, however, has raised concerns due to a small validator set, prompting discussions about centralization and control [1]. Observers note that if Arc successfully harnesses USDC, it could shift liquidity away from existing platforms such as Ethereum, though governance challenges remain [4]. This echoes past initiatives like Binance Chain and Tether’s solutions, where centralization concerns have persisted. Jeremy Allaire stated that Arc will remain interoperable with Circle’s partner blockchains [9], signaling an attempt to balance control with broader ecosystem integration.

Circle’s strategy with Arc underscores its ambition to bridge traditional finance and blockchain infrastructure [9]. With its public testnet launching in late 2025, the platform will offer developers and partners a chance to engage with the network ahead of full deployment [6]. The launch also reflects the company’s ability to attract investor interest, as its stock rose 6.5% in pre-market trading following its first earnings report as a publicly traded entity [12].

Overall, Arc represents a significant step in Circle’s evolution from a stablecoin issuer to a key infrastructure player in the blockchain space [7]. By building a purpose-designed, secure, and scalable Layer-1 network, the company aims to reinforce the role of USDC in global digital finance [16].

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Source:

[1] Cointelegraph - USDC Issuer Circle Introduces New Layer-1 Blockchain Arc (https://cointelegraph.com/news/usdc-issuer-circle-layer-1-blockchain-arc)

[2] AInvest - Circle Launches Arc Blockchain to Power USDC-Based Finance Settlements (https://www.ainvest.com/news/ethereum-news-today-circle-launches-arc-blockchain-power-usdc-based-finance-settlements-2508/)

[3] TheStreet (Yahoo Finance) - Circle Announces New Blockchain Amid Blockbuster Earnings (https://finance.yahoo.com/news/circle-announces-blockchain-amid-blockbuster-143219215.html)

[4] CoinDesk - Circle Unveils Layer-1 Blockchain Arc, Reports $428 Million Q2 Loss (https://www.coindesk.com/business/2025/08/12/circle-unveils-layer-1-blockchain-arc-reports-usd428-million-q2-loss)

[9] Bitcoinist - Circle Unveils Arc: A New Blockchain Built for Stablecoins (https://bitcoinist.com/circle-unveils-blockchain-stablecoins-powered-usdc/)

[13] AInvest - Stripe and Circle Launch EVM-Competitive L1s Tempo and Arc to Challenge Ethereum and Solana Ecosystems (https://www.ainvest.com/news/ethereum-news-today-stripe-circle-launch-evm-compatible-l1s-tempo-arc-challenge-ethereum-solana-ecosystems-2508/)