Circle Launches Arc Blockchain with USDC Gas

Sean Williams
Circle

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  • Circle’s Arc blockchain will use USDC as the native gas token, enabling stablecoin-based transaction fees.
  • Arc targets high-speed payments, FX swaps, and tokenized real-world assets with throughput exceeding 3,000 TPS.
  • Deep integration with Circle’s payments network and regulatory compliance aims to bridge traditional finance and blockchain.

Circle, the issuer of USD Coin (USDC), has unveiled Arc, a high-performance, enterprise-grade Layer-1 blockchain built on the Ethereum Virtual Machine (EVM). Designed for regulated finance, Arc will use USDC as its native gas token, enabling direct stablecoin-based transaction fees.

High-Speed Payments and Market Applications

Arc is engineered for institutional-grade payments, foreign exchange transactions, and capital market operations. The network’s litepaper highlights throughput of 3,000 transactions per second with settlement speeds under 350 milliseconds using 20 validators. Smaller validator sets could exceed 10,000 TPS with near-instant confirmation.

A built-in stablecoin FX engine will facilitate low-friction currency swaps. While transaction amounts in confidential transfers will be hidden, addresses remain visible, with authorized parties able to access data via view keys.

Integration with Circle’s Expanding Network

Arc will be deeply integrated with Circle’s Payments Network, launched in May, which has over 100 financial institutions onboarding. It will connect to the Cross-Chain Transfer Protocol (CCTP) and the Gateway for faster, secure cross-chain transactions. The platform will also host USYC, an interest-bearing stablecoin pegged to short-term U.S. Treasury securities.

The blockchain will support tokenized real-world assets such as equities, bonds, and private credit—fully collateralized and issued by approved partners. Public testnet release is scheduled between September and December 2025.

Governance and Market Integrity

Arc will launch with a permissioned proof-of-stake model, gradually expanding validator participation. To combat maximal extractable value (MEV) issues, Arc will implement encrypted mempools and batch transaction processing. This focus on integrity and compliance positions Arc to bridge traditional finance and blockchain ecosystems.

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The launch follows strong Q2 2025 results, with Circle’s total revenue and reserve earnings climbing 53% year-over-year to $658 million. USDC circulation surged 90% to $61.3 billion by quarter-end, reaching $65.2 billion in early August. Despite a $482 million net loss from non-cash IPO-related charges, Circle’s $1.2 billion IPO in June secured $583 million in net proceeds.

With 28% market share in fiat-backed stablecoins and the recent passage of the GENIUS Act, Circle is positioned to leverage Arc as a regulated, scalable blockchain hub for global payments and asset tokenization.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses

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