Circle unveils Arc, a stablecoin-focused Layer 1 using USDC for gas

picture: Circle official website

Circle is entering the Layer-1 arena with Arc, a new “open” blockchain it says is purpose-built for stablecoin finance — targeting the pain points it hears most from fintechs and enterprises trying to run payments on public chains. The pitch: predictable, dollar-denominated fees, no need to hold a volatile native token just to pay gas, and an architecture designed around stablecoin settlement from day one.

Circle says Arc is built to stand alone as its own independent ecosystem and will start rolling out soon: private testnet “in the coming weeks,” public testnet expected “this fall,” and a mainnet beta in 2026.

What Circle says Arc does differently

Arc’s headline design choice is USDC as native gas — meaning network fees are intended to be low, predictable, and dollar-denominated, according to the company. Circle also says Arc includes a built-in FX engine, described as an institutional-grade RFQ system for price discovery and 24/7 on-chain PvP (payment-versus-payment) settlement.

On performance, Circle claims Arc offers deterministic sub-second finality, powered by Malachite, which it calls a highly performant consensus engine. It also highlights opt-in privacy, with “selectively shielded balances and transactions” intended to help enterprises handle sensitive payment data while staying compliant with their obligations.

Arc is also positioned as deeply integrated with Circle’s product stack — with “native support” for services including Circle Payments Network (CPN), USDC, EURC, USYC, CCTP, and other Circle tooling.

The “so what”: why Circle thinks enterprises need a new chain

Circle’s case is that today’s public chains weren’t designed with stablecoins as the primary workload. It lists the recurring enterprise objections: fees that aren’t predictable, treasury teams unwilling to hold volatile tokens just to pay gas, concerns about moving sensitive payment data on fully public rails, and the basic support question — “who do we call if we need help?”

Arc is Circle’s attempt to turn those objections into product requirements — stablecoin-native fees, stablecoin-native FX, fast settlement, and privacy controls — while still remaining EVM-compatible so developers can use familiar tooling.

What builders can use it for (according to Circle)

Circle lays out a menu of use cases it wants Arc to unlock, including cross-border payments and payouts, stablecoin FX perpetuals, on-chain credit that incorporates “off-chain trust signals,” capital markets settlement and tokenized collateral, and “agentic commerce” for programmatic payments.

In other words: Circle isn’t framing Arc as “a chain for USDC.” It’s pitching it as a stablecoin settlement layer for everything from payments to tokenized assets — with stablecoins (and tokenized money market products like USYC) sitting close to the core.

Under the hood: Malachite and Informal Systems

A notable technical detail: Circle says the Malachite team from Informal Systems has joined Circle, bringing expertise and IP to help build Arc and continue Malachite development. Circle also says Arc’s core software will be released under a permissive open-source license.

What happens next

• Private testnet: “in the coming weeks.”
• Public testnet: expected “this fall.”
• Mainnet beta: planned for 2026.
• Watch for details on how Arc’s USDC-as-gas model and opt-in privacy are implemented in practice as testnets roll out.

What we don’t know yet

• Whether Circle will publish independent benchmarks for sub-second finality and fee predictability beyond the high-level claims in this announcement.
• How Arc’s “selectively shielded” privacy model will interact with different compliance regimes in real deployments (beyond the stated intent).

Source: Circle Blog — “Introducing Arc: An Open Layer-1 Blockchain Purpose-Built for Stablecoin Finance”