USD Coin (USDC)‘s creating company, Circle, has revealed intentions to debut “Arc,” a Layer 1 blockchain specifically designed for businesses. The announcement was made public on August 12th in an official
company statement.
The firm has stated that:
“Arc is being developed to act as a basic component for managing regulated financial transactions, assisting in the development of a global, decentralized financial system.”
Circle has said that Arc will work seamlessly with its existing services and will also be able to connect with numerous other blockchain platforms.
The public testing phase for Arc is expected to begin sometime between September and December of 2025.
Introducing Circle’s New Blockchain, Arc
Arc is intended to provide a strong, efficient foundation for applications involving stablecoin transactions, foreign exchange dealings, and activities within capital markets.
This network is built to be compatible with the Ethereum Virtual Machine (EVM). Moreover, USDC will be the primary token used for covering transaction fees. A built-in engine for stablecoin foreign exchange, confirmation times of under a second, and optional privacy functionalities are also being introduced.
According to the project’s official documentation, Arc is designed to handle approximately 3,000 transactions per second (TPS) with a confirmation time of less than 350 milliseconds when utilizing 20 validators. Theoretically, using only four validators, the network could reach up to 10,000 TPS with confirmation times below 100 milliseconds.
Arc will also include private transfer options, allowing for transaction amounts to be hidden while addresses remain visible. The selective sharing of transaction details will be facilitated through a “view key.”
Efforts to reduce Miner Extractable Value (MEV) include plans for encrypted transaction pools, grouped transaction processing, and systems involving multiple transaction proposers.
Arc will give support to Circle’s USYC stablecoin, which earns interest and is backed by short-term United States Treasury securities. The platform will also enable quick cross-chain transfers using Circle’s Cross-Chain Transfer Protocol (CCTP) and Gateway. Furthermore, a built-in currency exchange system for verified institutions and tools powered by AI for treasury management will be offered.
Looking beyond stablecoins, Arc is being developed to accommodate various regulated real-world assets such as tokenized stocks, bonds, private credit, and institutional investment funds.
Circle is intending to work alongside licensed asset issuers, custodians, and fund administrators to guarantee legal compliance and full collateralization of these assets. Integration with existing financial obligations is another key objective.
Community Skepticism Emerges
Despite its ambitious roadmap, the unveiling of Arc has met with some resistance from members within the cryptocurrency community.
Omid Malekan, an adjunct professor at Columbia Business School, suggested that introducing another Layer 1 blockchain might be unnecessary. He argued that stablecoins may struggle to thrive without a diverse asset base or a robust decentralized finance ecosystem.
Adam Cochran, a partner at Cinneamhain Ventures, a venture capital company, also challenged the labeling of Arc as a Layer 1 blockchain.
According to Cochran, the network more accurately resembles a consortium blockchain, managed by a select group of pre-approved, private validators. He pointed out that these validators would have the power to reverse transactions through specific “dispute protocols.”
Furthermore, Cochran argued that the use of USDC as the core token eliminates the financial incentives necessary for validators to operate independently, making a decentralized Layer 1 setup unfeasible. He stated that this design inevitably leads to a closed, consortium-based structure.
Cochran concluded:
“Blockchains came into being to eliminate exploitative intermediaries such as banks and transfer agents, which impose unreasonable fees and censorship. This industry was founded on the principles of peer-to-peer systems, not on creating new versions of traditional banks.”