Circle Launches Arc Blockchain With USDC Gas Token and Enterprise Payment Integration

Circle launched Arc blockchain using USDC as a gas token to enable payments and asset tokenization in regulated markets.

Arc integrates with Circle Payments Network and supports cross chain transfers for faster stablecoin and FX transactions.

Circle reported USDC circulation growth to 65.2B in August 2025 despite a net loss linked to IPO expenses.

Stablecoin issuer Circle has launched Arc, an enterprise-grade Layer-1 blockchain. The platform operates on the Ethereum Virtual Machine. USDC will serve as the native gas token for all transactions. Arc integrates with Circle services and supports interoperability with partner blockchains.

Payment and Market Applications

The network targets stablecoin payments, foreign currency transactions, and capital market use cases. Its litepaper outlines a capacity of 3,000 transactions per second and settlement speeds under 350 milliseconds using 20 validators. Smaller validator sets could process over 10,000 transactions per second with near-instant settlement.

Arc will include a stablecoin FX engine for low-friction currency swaps. Amounts in confidential transfers will remain hidden, but addresses will be visible. Selective disclosure will be possible through view keys for authorized parties.

Integration With Circle’s Payments Network

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

Arc will support tokenized real-world assets, including equities, bonds, and private credit. These assets will be fully collateralized and issued by authorized partners.

Market Integrity and Governance

Arc will deploy measures to reduce maximal extractable value, including encrypted mempools and batch processing. The governance model will start as permissioned proof-of-stake, later expanding validator numbers. The platform is built for regulated finance, linking traditional institutions with blockchain infrastructure

It will offer compatible tools for asset issuers, custodians, and fund administrators. The public testnet release is planned between September and December 2025.

Circle’s Financial Update

In Q2 2025, Circle’s total revenue and reserve earnings rose 53% year-over-year to $658 million. USDC circulation increased by 90% to $61.3 billion by quarter-end and reached $65.2 billion in early August.

The company reported a $482 million net loss, mainly due to $591 million in non-cash charges linked to its IPO. These included $424 million in stock-based compensation and $167 million from convertible debt.

Circle completed a $1.2 billion IPO in June, generating $583 million in net proceeds. USDC holds 28% of the fiat-backed stablecoin market. The company minted over $42 billion USDC in the quarter and redeemed $40.8 billion.

Circle also noted the passing of the GENIUS Act, creating a federal regulatory framework for stablecoins to enhance consumer protection and support innovation.