Circle, the company behind it USDC Stablecoin launched a new one Blockchain A platform called ARC. Unlike blockchains such as Ethereum and Solana, ARC is a Layer-1 network specially designed to support Stablecoin-based applications.
stablecoins This is a token whose value is linked to Fiat currencies such as the dollar. The ARC is a circle’s efforts to address infrastructure challenges that limit the adoption of stubcoin on an institutional scale.
“We helped businesses and builders use USDC in dozens of networks,” said Rachel Mayer, Circle’s vice president of product management. Decryption. “Consistent feedback is: make costs predictable, make payment finality critical, and make privacy compatible with real-world obligations.”
In this article, we’ll explain what Arc is, how it works, and which Circle is different from other blockchain platforms.
Why did the circle build the arc?
For years, some of the Crypto Market have seen an increase in interest and adoption after the passage of the Genius Act, which President Donald Trump signed into law in July 2025.
However, the Circle argues that most existing blockchains are not designed to support stubcoin. General restrictions referring to circles include:
- 🎢 Fee Volatility
- Probabilistic settlement with the risk of reorganisation of Chain
- Declive Lack of privacy management for delicate commercial transactions
- 💧Fragmented fluidity across multiple chains
According to Circle, ARC addresses these challenges by providing instant and irreversible transactional payments (known as deterministic finality), predictable fees for stable prices, optional privacy features that support regulatory compliance, and built-in connectivity to other blockchains and traditional financial systems.
The ARC is deployed in three phases.
- Private Test Net It started in August 2025
- Public Test Net It is expected in autumn 2025
- Mainnet Beta Scheduled for 2026
USDC as a native gas
By using USDC, a digital currency backed by real-world assets, Circle aims to eliminate the need for unstable tokens to pay for transactions. The network can also be supported as gas as other Stablecoins via the Paymaster system.
According to Circle, ARC’s pricing model is based on Ethereum’s EIP-1559 architecture, but replaces block-level adjustments with a weighted average of network demand. This smoothing mechanism keeps fees low and is predictable. The fees are named USDC and directed to the Aviation and Treasury Chain.
“ARC’s fast finality and native gas are CTIL’s CCTP and Gateway Interoperability Service-as-a-Stablecoin liquidity hubs, allowing USDC to move freely through the blockchain ecosystem,” Mayer said. “Therefore, builders and users can join the network that suits their needs while tapping on ARC’s Stablecoin-Optimized Rails.”
This design allows for a stable fee structure based on dollars, auditable. The circle says it is better suited to financial institutions than the speculative token model.
Deterministic Reconciliation and Consensus
The ARC consensus layer is powered by Malachite, a Byzantine fault tolerant (BFT) engine based on tendermint. Currently, validator selection is permitted and is based on operational resilience, geographical distribution and regulatory compliance. According to Circle, the plan involves moving to a “permitted” proof mechanism.
To reduce the chances of abuse, the circle has developed tools such as encrypted Mempools, Batch Transaction Processing, and Multi-Proposer Consensus.
Institutional opt-in privacy
The ARC includes a modular privacy system designed to balance compliance and confidentiality. The first feature, Confidential Transfers, shields the amount of transactions while displaying addresses. Smart contracts interact with the encryption backend via precompilation using a trusted execution environment (TEE) for private calculations.
The agency may selectively disclose data to a regulator or auditor via view key. Over time, ARC will support:
- Private state and confidential calculations
- Zero Knowledge Proof (ZKPS)
- Multi-party Calculation (MPC)
- Fully isomorphic encryption (FHE)
Circle’s tools connect Fiat and USDC across ARC and other blockchains. MINT converts FIAT to USDC with ARC by burning and remining across the chain, while Gateway provides a balance between wallet and app embedded USDC.
“ARC will strengthen the broader multichine ecosystem by unlocking new use cases, partners and institutional liquidity on-chain,” Mayer said. “Builders and users can join the network that suits their needs by tapping ARC’s Stablecoin-Optimized Rails.”
Placement in the blockchain ecosystem
ARC enters a competitive environment that includes public tier 1 blockchains such as Bitcoin, Ethereum and Solana, stable layer 1 blockchains such as Plasma and Frontier, layer 2 networks such as Arbitrum and Base, and private or semi-public networks operated by payment companies.
Circle’s differentiator is its existing position in the market as the issuer of USDC, one of the biggest stub coins.
ARC aims to expand its stable utility beyond payments to real-time settlements, tokenization and global capital by building a purpose-specific chain for programmable and compliant financial operations.
“Regulation clarity is often a catalyst for institutional adoption,” Mayer said, adding that ARC is designed to be “enterprise grade.”
