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Circle, a stablecoin issuer, has launched its own blockchain called Arc to process stablecoin payments directly, competing with Visa, Mastercard, Ethereum, and Solana. The move aims to lock in a more durable role in digital finance and generate more revenue. Circle's shares have surged 350% since its IPO, but growth is slowing, and distribution costs are rising. Stripe is also building a stealth blockchain project, Tempo, to create its own end-to-end network for stablecoin payments.

Circle Internet Group Inc. has taken a significant step into the digital finance landscape by unveiling Arc, a new blockchain designed to process stablecoin payments directly. This move positions Circle in direct competition with established payment giants like Visa and Mastercard, as well as prominent crypto networks such as Ethereum and Solana. The launch of Arc is part of Circle's broader strategy to secure a more durable role in digital finance and generate additional revenue streams.

Circle's decision to build its own blockchain infrastructure comes at a time when the company is experiencing slowing growth and rising distribution costs. Since its IPO, Circle's shares have surged by over 350%, but the company is now facing challenges in maintaining this momentum. According to David Koning, a senior research analyst at Robert W. Baird & Co., non-interest revenue is expected to be lower in the second half of the year, and distribution costs are climbing [1].

The Arc blockchain is designed to handle stablecoin payments, leveraging Circle's USDC token as the native asset for transaction fees. This move aims to provide a low-cost, predictable fee structure that can meet the stringent demands of major financial institutions and enterprises. The blockchain network pairs with Circle Payments Network (CPN), which handles compliance and orchestration, while Arc settles the actual funds movement. Fees for these services are paid in USDC [1].

Circle's move is not isolated. Stripe Inc. has also been working on a stealth blockchain project called Tempo, which aims to create its own end-to-end network for stablecoin payments. This competition signals a shift in the stablecoin landscape, where companies are increasingly looking to control the infrastructure that moves digital assets [1].

The growing number of companies building their own blockchain networks has raised concerns about the potential for new "walled gardens." Christian Catalini, founder of the MIT Cryptoeconomics Lab, warns that these moves could lead to more closed ecosystems, which goes against the original promise of stablecoins to bring greater interoperability and openness [1].

Despite the challenges, Circle remains optimistic about its future. The company's market-neutral model, deep liquidity infrastructure, and strong regulatory position position it as a leading stablecoin provider for institutional adoption. Circle's focus on strategic partnerships and small-scale, product-aligned acquisitions is also expected to drive further growth in USDC adoption and usage [2].

As Circle continues to execute on its growth strategy, it is well-positioned to capture a significant share of the stablecoin market and drive long-term shareholder value. The launch of Arc is a critical step in this journey, as it allows Circle to control the system that moves its stablecoins and potentially generate more revenue through transaction fees.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-19/circle-bets-on-its-own-blockchain-in-challenge-to-payment-giants
[2] https://www.ainvest.com/news/circle-reports-53-revenue-surge-launches-blockchain-network-arc-2508/