What Is Arc? The Stablecoin Blockchain From USDC Issuer Circle
Summary
Circle, the issuer of USDC, launched the Arc blockchain on September 16, 2026, introducing a layer-1 network designed specifically for stablecoin-based applications. The platform uses USDC as native gas to eliminate volatile transaction fees and features a built-in FX engine for foreign exchange operations. Arc's public mainnet went live on September 16, 2026, following a testnet that processed over 700 million transactions in under a year. The network employs a permissioned consensus model powered by the Malachite engine, with validators including major financial institutions like BlackRock, Visa, and Mastercard. Circle aims to address infrastructure challenges such as fee volatility and probabilistic settlement that limit stablecoin adoption at an institutional scale.
Key points
- Arc's fee model uses a weighted moving average of network demand, replacing block-level adjustments with a smoothing mechanism to keep fees low and predictable.
- The network supports over 100 institutional and ecosystem partners on its first day, including Aave, Uniswap, and BNY Mellon.
- Circle plans to transition Arc's consensus from proof of authority to proof of stake in 2027, with the ARC token serving as the coordination mechanism.
- USDC accounts for 98.8% of agent-driven transaction volume on Arc, which includes tooling for AI agents to transact independently.
- The DTCC will enable tokenization of assets held in its custody on the network, though this feature is scheduled for the second half of 2027.
Timeline
The GENIUS Act is signed into law, boosting stablecoin adoption.
Arc's public testnet launches.
Arc's public mainnet goes live.
Arc plans to transition to proof-of-stake consensus.
DTCC enables tokenization of assets on Arc.
“"The consistent feedback has been: make costs predictable, settlement finality deterministic, and privacy compatible with real-world obligations."”
Background
Circle built Arc to address infrastructure challenges like fee volatility and probabilistic settlement that limit stablecoin adoption at an institutional scale.
Why it matters
Arc's deterministic finality and stablecoin-native gas model provide a more predictable and compliant environment for financial institutions compared to speculative token models.
What's next
Circle plans to expand Arc's capabilities over time, with the ARC token playing an increasingly central role as the network transitions to proof-of-stake.