Circle, the issuer of USD Coin (USDC), has announced plans to introduce its own Layer 1 blockchain, Arc, designed specifically for stablecoin-focused applications. The launch follows the company’s $1.2 billion initial public offering (IPO) in June and is scheduled to debut on a public testnet later this fall.
According to Circle, Arc will be an enterprise-grade, EVM-compatible blockchain supporting payments, foreign exchange, and capital markets use cases.
The network will use USDC as its native gas token, feature a stablecoin FX engine, offer sub-second settlement times, and provide optional privacy for transactions. The platform will be fully integrated with Circle’s existing infrastructure while maintaining interoperability with partner blockchains.
Arc in Context: Stablecoin Sector Competition and Circle’s Market Position
Circle is currently the second-largest stablecoin issuer, with USDC making up $65 billion of the roughly $260 billion total dollar-pegged stablecoin market. The company’s move into operating its own blockchain comes as other major issuers explore similar strategies.
Tether, the market leader, has supported and developed stablecoin-oriented blockchains such as Stable and Plasma, highlighting growing competition in this niche.
The announcement coincided with Circle’s second-quarter financial results. The company reported that USDC in circulation increased 90% year-over-year to $61.3 billion, with an additional 6.4% growth bringing the total to $65.2 billion as of August 10.
Total revenue and reserve income grew 53% year-over-year to $658 million, while other revenue , including subscription, services, and transaction income, rose 252% year-over-year.
Despite these gains, Circle posted a net loss of $482 million, which it attributed primarily to $591 million in IPO-related non-cash charges, including $424 million in stock-based compensation and $167 million tied to convertible debt valuation changes. Adjusted EBITDA increased 52% year-over-year to $126 million.
Regulatory Landscape and Strategic Outlook
CEO Jeremy Allaire described the second quarter as a milestone period, noting that Circle’s IPO marked a significant moment for both the company and the stablecoin industry.
“We demonstrated sustained growth and adoption of our platform across a multitude of use cases and with a diverse set of industry-defining partners,” Allaire said, adding that the IPO has accelerated global interest in building on stablecoins and collaborating with Circle.
The company also emphasized the importance of the recent enactment of the GENIUS Act, signed into law by President Trump. The legislation establishes a federal regulatory framework for payment stablecoins, setting compliance standards for issuers.
Circle stated that its long-standing approach to regulatory alignment is now reinforced by these new legal requirements, positioning it strongly within the regulated stablecoin space.
By launching Arc, Circle seems to be aiming at expanding its role beyond issuing USDC to directly operating blockchain infrastructure tailored for stablecoin settlement and related financial services.
Featured image created with DALL-E, Chart from TradingView
