Circle's Arc Blockchain to Use USDC as Native Gas
Circle's new open L1 blockchain, Arc, is designed for stablecoin finance and will use USDC as its native gas token. This allows institutions to deploy capital and conduct transactions without holding volatile assets, a model one institutional partner described as enabling "pure efficiency" for tokenized real-world assets.
- Arc is an Ethereum Virtual Machine (EVM) compatible, open Layer-1 blockchain specifically designed for institutional finance, representing Circle's strategic shift from a stablecoin issuer to a full-stack financial infrastructure provider. - The blockchain utilizes a high-performance consensus engine called Malachite, acquired from Informal Systems, to achieve deterministic, sub-second transaction finality, which eliminates the risk of transaction reversals (reorgs) common on other blockchains. - A key feature for institutional users is opt-in privacy through selectively shielded balances and transactions, which allows firms to remain compliant with their specific regulatory obligations while transacting on a blockchain. - Arc is positioned as a competitor to traditional financial infrastructure like SWIFT, targeting high-value use cases such as cross-border payments, foreign exchange settlement, and the trading of tokenized real-world assets. - The launch comes as the regulatory landscape for stablecoins solidifies globally, with frameworks like the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in the U.S. and MiCA in the EU providing clearer rules for issuers and increasing institutional confidence. - Circle's public testnet for Arc, launched in the fall of 2025, included participation from over 100 institutions such as BlackRock, Goldman Sachs, and Deutsche Bank, indicating strong interest from traditional finance. - The platform integrates Circle's entire product suite, including its Cross-Chain Transfer Protocol (CCTP), which processed $31 billion in USDC transfers in Q3 2025, showcasing the existing demand for interoperable stablecoin infrastructure. - This move places Circle in direct competition with other fintech giants building their own payment-focused blockchains, such as Stripe's "Tempo" blockchain, also designed for high-performance stablecoin transactions.
