Key Highlights:
- Circle introduces Arc, a new enterprise-grade Layer-1 blockchain.
- Announced in Circle’s Q2 2025 report alongside a $1.2B IPO, making Arc central to its stablecoin finance strategy.
- Public testnet to roll out in fall 2025.
In its Q2 2025 results, Circle announced Arc, a new open Layer-1 blockchain that is built for enterprise-grade stablecoin finance. According to the report, Arc is designed to power stablecoin payments, foreign exchange, and capital markets, combining advanced blockchain tech with Circle’s experience in digital money infrastructure.
The Q2 2025 report describes Arc’s debut as a “pivotal step in building a full-stack financial platform for the internet economy”. Along with the announcement, the report also highlighted Circle’s other achievements such as its successful $1.2 billion IPO and the rollout of the Circle Payments Network. The payment network initiative already has more than 100 institutions in the onboarding process.
Purpose-Built for the Stablecoin Era
The reason that sets Arc apart is its full EVM compatibility. It will allow developers to use the same tools and framework that they already rely on for Ethereum and build dApps along with smart contracts. It also makes it easy for enterprises to connect with existing Ethereum-based systems, giving them a smooth path to migrate or expand their capabilities.
In a first for the industry, USD Coin (USDC) will be Arc’s native gas token, which means all the transaction fees will be paid directly in USDC, which is pegged 1:1 to the U.S. dollar. By ditching volatile native tokens for gas, Arc locks in predictable, dollar-denominated costs, giving businesses and institutions the stability they need to operate at scale in the economy.
Integrated Stablecoin FX and Ultra-Fast Settlement
A standout feature of Arc is its built-in stablecoin FX engine. This feature will allow cross-currency stablecoin transactions to happen natively on-chain, no need for external FX platforms. For enterprises in cross-border payments and capital markets, this is something that will change the game entirely. This will also slash settlement risks and cut out the costly middlemen.
On speed, Arc delivers sub-second settlement finality. This means that the platform will confirm and lock in the entire transaction in less than a second. This is in alignment with other traditional payment networks that are considered to be top-tier. This feature makes it a perfect fit for high-volume, real-time trading and payment flows.
Privacy with Compliance in Mind
Arc tackles one of enterprise blockchain’s toughest challenges which is privacy without breaking compliance. With opt-in privacy controls, sensitive transaction details are not on the public record but still allow full auditability for the regulators. It is a sweet spot built for banks, fintechs, and capital markets players who need confidentiality and compliance to work hand in hand.
Fully Integrated with Circle’s Platform
Circle’s Q2 report confirms Arc will plug directly into its full suite of services while staying interoperable with dozens of other blockchains already in Circle’s orbit. That means value can move seamlessly across ecosystems, making Arc an update to the digital asset landscape, not another isolate chain.
Circle’s CEO Jeremy Allaire, stressed that Arc is not just another blockchain but it is purpose-built infrastructure for the new internet financial system. With smart contract programmability, stablecoin-native payments, built-in FX, and near-instant settlement, Arc is aiming squarely to become the go-to financial-grade blockchain for businesses and institutions worldwide.
Launch Timeline
Arc is set to hit public testnet in fall 2025. This will give developers, institutions, and partners an early chance to put its features through their paces before the full production rollout. With USDC built in, Arc is set to push stablecoin-based finance, lowering costs and opening new opportunities for payments, trading and more.
A Strategic Shift in Layer-1 Development
Arc’s debut signals a shift in blockchain design, from one-size-fits-all Layer-1s to specialized, enterprise-grade networks. While most chains battle over speed and scale, Arc zeroes in on compliance, finance-ready performance, and native currency stability, core ingredients for bridging blockchain into the mainstream of payments and capital markets.
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