Circle, the financial technology firm behind USD Coin (USDC), announced on August 12 the launch of Arc, a new Ethereum-compatible Layer-1 blockchain built specifically for financial applications. Notably, Arc will use USDC for gas fees, aiming to streamline stablecoin-based payments while ensuring compliance with regulatory frameworks. The testnet is scheduled to debut in September 2025.
Institutional Demand Drives Infrastructure Expansion
The move comes after Circle’s successful IPO in June 2025, which bolstered its financial strength and market position. Beyond simply issuing USDC, the company is now expanding into core blockchain infrastructure.
CEO Jeremy Allaire noted, “Across all major sectors of the financial industry, stablecoin-powered systems and partnerships with Circle are accelerating.” This reflects a growing institutional appetite for stablecoin-based settlement systems that bridge traditional finance and crypto infrastructure, opening up new market opportunities.
While existing blockchains were not originally designed for stablecoin-centric usage, Arc aims to eliminate inefficiencies by offering a purpose-built, compliant environment for digital asset payments.
Introducing Arc, the home for stablecoin finance.@Arc is an open Layer-1 blockchain purpose-built to drive the next chapter of financial innovation powered by stablecoins.
Designed to provide an enterprise-grade foundation for payments, FX, and capital markets, Arc delivers… pic.twitter.com/Z8FHUls1xY
— Circle (@circle) August 12, 2025
Enterprise-Ready Design and Interoperability
Arc is designed with enterprise adoption in mind, supporting sub-second transaction finality. It will also feature an integrated FX engine enabling seamless exchanges between various stablecoins and fiat currencies.
To address privacy needs, Arc will offer privacy controls that balance transaction transparency with commercial confidentiality—a key requirement for institutional users.
Circle emphasized that Arc will remain compatible with the 24+ blockchains where USDC is currently active, maintaining its multi-chain strategy while introducing a dedicated public, permissionless network operated by a new foundation.
With Arc, Circle is positioning itself as a full-stack financial infrastructure provider, not just a stablecoin issuer, potentially introducing fresh competitive pressure against platforms like Ethereum (ETH).
