XRP News Today: Circle Acquires Malachite to Build Arc Blockchain for USDC Finance

Circle, the issuer of the USDC stablecoin, has acquired the consensus engine Malachite from Informal Systems, a software development firm. This move is intended to support the development of Arc, a new blockchain tailored specifically for stablecoin finance. According to a press release, several employees from Informal Systems will join Circle, though no financial details of the acquisition were disclosed. The acquisition marks a significant step in Circle’s broader strategy to build a proprietary blockchain that enhances the utility and efficiency of USDC while enabling a 24/7 foreign exchange engine on-chain [1]. The new blockchain will be compatible with the Ethereum Virtual Machine (EVM), aiming to attract developers from Ethereum’s ecosystem [1].

The Arc blockchain is designed to facilitate fast, secure, and privacy-optional transactions with settlement times under one second. It remains open source under the Apache 2.0 license, allowing developers to use and extend the technology. Informal Systems will continue to support other use cases for Malachite and advance its broader projects, including cross-chain infrastructure and tools for distributed systems [1].

The development of Arc raises questions about potential competition with existing blockchain platforms, particularly Ripple’s XRP Ledger (XRPL). While XRP Ledger focuses on cross-border payments and transaction settlement, Arc’s stablecoin-centric design could overlap in areas such as payments and institutional money transfers. However, XRP already has a strong presence in enterprise and regulated environments, where compliance tools are embedded in the protocol. This gives XRP an edge in maintaining relationships with asset issuers, a challenge for Arc to overcome [2]. Additionally, XRP’s low-cost and high-speed transactions remain difficult to replicate, reducing the likelihood of Arc significantly siphoning capital from XRP’s user base [2].

Despite this, Arc is likely to establish its own niche in the market by leveraging the existing USDC ecosystem. Circle’s strategy involves creating a vertically integrated solution for fintechs and institutional players already using USDC, a segment that has not traditionally been part of XRP’s target audience. If Arc successfully converts the widespread adoption of USDC into on-chain settlement, it could shift a portion of capital flows away from competing blockchains [2].

As of August 10, 2025, USDC has a circulation of nearly $65 billion, reflecting strong institutional and market confidence in the stablecoin. The stablecoin market as a whole is approaching $260–280 billion in total value, positioning Arc as a potential key player in on-chain finance. The Arc blockchain is currently in development, with a private testnet expected in the coming weeks, followed by a public testnet in the fall of 2025 and a mainnet beta in 2026 [2].

While the launch of Arc could challenge existing players in the stablecoin space, it is unlikely to render any single platform obsolete. Instead, the market is expected to segment, with different blockchains catering to specific use cases and customer needs. XRP is likely to retain its position in regulated and enterprise-driven applications, while Arc may attract users seeking a stablecoin-first infrastructure with low switching costs for developers. Investors are advised to monitor Arc’s performance during the public testnet phase and its ability to attract payments partners, as these factors will determine its long-term viability [2].