In brief
- Arc is a blockchain built by USDC issuer Circle for stablecoin-focused applications.
- It uses USDC for gas, features a built-in FX engine, and enables opt-in privacy.
- A public mainnet launch is expected on September 16, 2026, plus an ARC token has been announced.
Circle, the company behind the USDC stablecoin, has launched a new blockchain platform called Arc. Unlike blockchains like Ethereum or Solana, Arc is a layer-1 network designed specifically to support stablecoin-based applications.
Stablecoins are tokens whose value is tied to fiat currencies such as the dollar. Arc is Circle’s effort to address the infrastructure challenges that limit the adoption of stablecoins at an institutional scale.
"We've helped enterprises and builders use USDC across dozens of networks,” Rachel Mayer, VP of Product Management at Circle, told Decrypt. “The consistent feedback has been: make costs predictable, settlement finality deterministic, and privacy compatible with real-world obligations.”
This article will explain what Arc is, how it works, and what Circle says sets it apart from other blockchain platforms.
Why Circle built Arc
While a part of the crypto market for years, stablecoins like USDT and USDC have seen growing interest and adoption following the passage of the GENIUS Act, which President Donald Trump signed into law in July 2025.
However, Circle argues that most existing blockchains were not designed to support stablecoins. Common limitations that Circle points to include:
- 🎢 Fee volatility
- ⛓️ Probabilistic settlement with risk of chain reorganizations
- 🕵️ Lack of privacy controls for sensitive commercial transactions
- 💧 Fragmented liquidity across multiple chains
Circle said Arc addresses these challenges by offering instant and irreversible transaction settlement (known as deterministic finality), predictable fees priced in stablecoins, optional privacy features that support regulatory compliance, and built-in connections to other blockchains and traditional financial systems.
Arc's public testnet launched in October 2025. Circle will open Arc's public mainnet on September 16, 2026. The network is currently in private mainnet with more than 100 ecosystem and institutional builders, and Circle CEO Jeremy Allaire said in August 2026 that the testnet had processed more than half a billion transactions across nearly 3 million wallets.
USDC as native gas
By using USDC, a digital currency backed by real-world assets, Circle aims to eliminate the need for volatile tokens to pay transaction fees. The network can also support other stablecoins as gas via a paymaster system.
According to Circle, Arc’s fee model builds on Ethereum’s EIP-1559 architecture but replaces block-level adjustments with a weighted moving average of network demand. This smoothing mechanism keeps fees low and predictable. Fees are denominated in USDC and directed to an on-chain Arc Treasury.
“Arc's fast finality and native gas coupled with Circle's CCTP and Gateway interoperability service-as-a-stablecoin liquidity hub, enable USDC to move across the blockchain ecosystem freely,” Mayer said. “So builders and users can be on the networks that fit their needs while still tapping Arc’s stablecoin-optimized rails.”
This design enables dollar-based, auditable, and stable fee structures, which Circle said are better suited to financial institutions than speculative token models.
Deterministic settlement and consensus
Arc’s consensus layer is powered by Malachite, a Byzantine Fault Tolerant (BFT) engine based on Tendermint. Validator selection is currently permissioned and based on operational resilience, geographic distribution, and regulatory compliance. Plans include a transition to a “permissioned” Proof-of-Stake mechanism, according to Circle.
In August 2026, Circle named the founding validator cohort that will secure the network from launch. BlackRock, DTCC, Galaxy, Global Payments, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation and Visa will run validators alongside Circle itself.
To reduce the chance for abuse, the Circle is developing tools like encrypted mempools, batch transaction processing, and multi-proposer consensus, all aimed at ensuring fairer execution in financial applications.
What runs on Arc at launch
Circle has named Aave, Morpho and Uniswap among the DeFi protocols expected on Arc from day one, with Binance Wallet, Chainlink, Fireblocks, Kraken, Ledger, MetaMask and Upbit providing access and infrastructure, and Rain, Thunes and Wirex covering payments.
BlackRock is expected to deploy BUIDL, its tokenized money market fund, on Arc. DTCC will enable tokenization of assets held in its custody on the network, though not until the second half of 2027.
The ARC token
Circle published the Arc white paper in May 2026, outlining the ARC native token’s role as the “coordination mechanism” of the Arc network as it transitions to a proof-of-stake consensus model.
Under this model, a “permissioned” set of validators produces blocks and maintains the network, with rewards from inflation-funded issuance and fee-derived revenue converted into ARC.
