Circle launches Arc, its in-house blockchain for payments and tokenized assets

The USDC issuer changes size. Circle has just opened Arc, its in-house blockchain dedicated to payments, tokenized assets and institutional finance. The NYSE-listed group under the ticker CRCL is now tackling the rails that carry its $74 billion worth of USDC in circulation.

The launch comes as banks, payment processors and direct rivals each roll out their own infrastructure. Circle also plays an economic model still suspended from American key rates.

Key Points

Arc is an EVM compatible layer 1 where transaction fees are paid directly in USDC, without volatile gas tokens.

Sub-second finality via the Malachite consensus engine, integrated exchange engine and optional confidentiality of amounts.

Circle wants network revenue: in 2024, almost all of its $1.68 billion in revenue came from interest on reserves.

Tether (Plasma), Stripe (Tempo), Google and JPMorgan are also rolling out their own payment rails.

Arc, the blockchain that Circle is carving out for payments

Arc is compatible with the EVM (Ethereum Virtual Machine), the Ethereum virtual machine. Developers can therefore redeploy their smart contracts without rewriting their code. The singularity lies in the fuel, since transaction fees are settled in USDC, without an intermediate volatile token. A financial department can thus budget its settlement costs in dollars.

The consensus is based on Malachite, a BFT (Byzantine Fault Tolerance) engine from Informal Systems. Circle promises a deterministic finality under the second: once validated, the transaction becomes irrevocable, without waiting for the stacking of several blocks as on Bitcoin or Ethereum. For an interbank settlement, the difference is counted in hours of immobilized cash.

Two bricks directly target businesses. An integrated exchange engine allows you to switch from one stablecoin to another, from USDC to EURC for example, in the same transaction. Optional confidentiality hides the amounts while leaving the data accessible to auditors and regulators. No financial director agrees to display his payroll or supplier payments on a public register.

The network has been operating as a public testnet since fall 2025, with more than a hundred companies and institutions on board. All validators remain restricted at start-up, with Circle promising a gradual opening. The criticism is already on the table: the issuer of the stablecoin also operates the chain that transports it. The institutions concerned see above all an identifiable person responsible in the event of an incident.

Beyond USDC, Circle seeks revenue that is no longer dependent on the Fed

Circle reported $1.68 billion in revenue in 2024. Almost all of it came from interest earned on USDC reserves, placed in U.S. Treasuries and bank deposits. More than $900 million then went to Coinbase under the stablecoin distribution agreements.

The IPO prospectus quantified the fragility of this equation: a 200 basis point drop in rates would reduce reserve income by several hundred million dollars at constant outstandings. The Federal Reserve has since initiated its monetary easing cycle. CRCL shares, introduced at $31 in June 2025, exceeded $290 during the summer before falling, with investors precisely watching for this diversification.

Hence the stacking of new floors. Circle Payments Network connects banks and providers for cross-border stablecoin settlements. The acquisition of Hashnote brought in USYC, a tokenized monetary fund that can be used as collateral. Arc provides the brick that charges for usage, since each transaction consumes USDC in fees and each application deployed on it feeds the demand for the house token.

Regulations made this shift necessary. The GENIUS Act, enacted in July 2025, established the first US federal regime for payment stablecoins and prohibits issuers from serving a return to their holders. Circle has filed a charter request with the OCC (Office of the Comptroller of the Currency), the regulator of national banks, to hold USDC-backed reserves itself.

Stablecoins: The race for in-house blockchains is accelerating

Arc, however, arrives in a crowded corridor. Tether supported Plasma, a chain dedicated to fee-free USDT transfers, before supporting Stable in the Bitfinex orbit. Stripe is developing Tempo with Paradigm, designed for merchant payments. Google Cloud is pushing its Universal Ledger to financial institutions.

Banks are no longer watching the scene from afar. JPMorgan issued its JPMD deposit token on Base, Coinbase's layer 2. Western Union is preparing a dollar stablecoin on Solana. Each player arrives with its own distribution network, which fragments the liquidity that stablecoins had begun to unify.