What Is Arc Network? Circle’s Stablecoin-Native Layer-1 Explained

TL;DR

Arc is an open Layer-1 blockchain built by Circle, the issuer of USDC, and designed specifically for stablecoin finance.

• Arc uses USDC as its native gas token, so transaction costs stay dollar-denominated and predictable.
• Consensus runs on Malachite, a Tendermint-based BFT engine delivering deterministic finality in under 1 second.
• The public testnet launched on October 28, 2025, with 100+ institutions testing, including BlackRock, Visa, and Goldman Sachs. Mainnet beta is expected in 2026.
• Circle raised $222M in an ARC token presale on May 11, 2026, at a $3B fully diluted valuation, led by a16z.
• Everstake, a validator operating across 130+ networks to date, follows Arc closely as a candidate network for staking support once mainnet launches.

What Is Arc Network?

Arc is an open Layer-1 blockchain purpose-built by Circle for moving, settling, and programming stablecoin money. It targets payments, settlement, foreign exchange, and capital markets applications.

Circle launched Arc publicly in August 2025 alongside its Q2 2025 results. The company describes it as a foundation for stablecoin-native applications that meet enterprise demands.

Circle is the second-largest stablecoin issuer, accounting for roughly $72B of the approximately $299B dollar-pegged stablecoin supply at announcement.

The chain treats stablecoins as first-class assets across its design. Every layer targets predictability, compliance, and institutional-grade performance.

Arc’s Current Status and Mainnet Timeline

Arc narrows its scope to financial coordination: payments, settlement, FX, and tokenized assets. It stays open and interoperable with other blockchains that already support USDC. Circle describes it as open infrastructure available to any developer or institution.

Arc remains in a testnet phase as of July 2026. Mainnet beta is expected later in 2026, subject to testnet results and regulatory readiness.

Arc follows a phased rollout common to financial infrastructure. The staged approach lets Circle test the network before value moves at scale.

The timeline to date breaks down as follows:

1. Private testnet launched in August 2025.
2. Public testnet launched on October 28, 2025, with 100+ institutional participants.
3. Mainnet beta is expected in 2026, subject to testnet results and regulatory readiness.
4. Full production timing remains undated, pending community and regulatory conditions.

Reportedly, by February 2026, the testnet had processed more than 166M transactions at roughly half-second finality. In April 2026, Circle confirmed Arc is expected to be quantum-resistant at mainnet launch.

Why Circle Built Arc

Circle built Arc to remove friction that stablecoins face on chains never designed for them. Most existing networks simply didn’t optimize for regulated assets, or seamless integration with traditional finance infrastructure.

The Problem With Stablecoins on General-Purpose Chains

Stablecoins on general-purpose chains inherit design constraints that complicate financial use. These chains were built before stablecoins became a primary use-case and load.

The main problems include:

• Volatile gas costs. Fees paid in a volatile native token mean the dollar cost of a transaction moves with that token’s price.
• Variable settlement times. Probabilistic finality forces users to wait for multiple confirmations, and congestion widens that window.
• Concerns over privacy. Fully public ledgers conflict with the confidentiality that institutional compliance often requires.
• Fragmented liquidity. Stablecoins are deployed separately on each chain, so balances scatter and reconciliation grows complex.

These constraints raise operational risk for payments and treasury teams. Arc’s architecture was designed with these problems in mind.

Circle’s “Economic OS” Thesis

Circle frames Arc as part of an “Economic OS” for the internet financial system. The idea positions the chain as a base layer for online money movement, much like an operating system gives applications core tools.

CEO Jeremy Allaire told CNBC the company is evolving beyond its stablecoin roots. He compared blockchain infrastructure to mobile operating systems and cloud platforms.

The thesis extends to newer patterns such as agentic commerce. Arc is designed to let autonomous systems and devices transact directly on-chain without human intervention.

How Arc Works

Arc combines a Tendermint-based consensus engine, an EVM-compatible execution layer, and stablecoin-native fee mechanics to target settlement-heavy financial workloads.

Consensus and Execution Architecture

Arc pairs the Malachite consensus engine with an EVM-compatible execution layer. The execution client is based on Reth, the modular Ethereum client from Paradigm.

Currently, Arc runs a permissioned proof-of-authority validator model. Finality is reached once two-thirds of validators commit a block, which increases speed at the cost of some decentralization guarantees.

Performance figures from testing show meaningful throughput. With 20 geographically distributed validators, Arc reached about 3,000 transactions per second, and smaller validator sets could push higher.

Malachite and Deterministic Sub-Second Finality

Malachite is an open-source, Rust-based Byzantine Fault Tolerant consensus engine derived from Tendermint. Circle acquired the technology and its team from Informal Systems in 2025.

Malachite provides deterministic finality. Once a supermajority of validators commits a block, it is final, with no reorganization risk and no multiple-confirmation wait.

The measured finality is in roughly 350 milliseconds, under the 1-second target which is crucial for payments and settlement.

USDC as the Native Gas Token

Arc uses USDC as its native gas token. This keeps transaction costs dollar-denominated and easier to budget.

On most chains, sending a stablecoin still requires holding a separate volatile token for gas. Arc removes that step by denominating fees directly in dollars.

USDC is the native asset on Arc and is used for gas. An optional ERC-20 interface is also available for developers who need functions such as transferFrom, approve, and allowance management.

Opt-In Privacy and Confidential Transfers

Arc offers opt-in confidential transfers, so transparency is configurable per transaction. The privacy model is designed to align with compliance requirements.

The confidentiality features are configurable and can use trusted execution environments. This lets institutions keep sensitive transaction details private while retaining auditability.

The design tries to balance two needs at once. It supports confidential business activity without abandoning the oversight that regulated finance expects.

StableFX: the Built-In FX Engine

StableFX is Circle‘s permissioned, enterprise-grade FX engine built into Arc. It combines off-chain request-for-quote (RFQ) execution with on-chain settlement.

The engine settles both legs of a currency trade at the same time. Payment-versus-payment settlement occurs within a single smart contract, which reduces settlement risk.

StableFX is live on the Arc testnet and available to approved institutions. It supports multi-currency activity using stablecoins such as USDC and EURC.

EVM Compatibility and Developer Tooling

Arc is EVM-compatible, so developers deploy Solidity contracts using familiar workflows. The same commands used for Ethereum work with configuration changes pointing to Arc.

The network exposes standard JSON-RPC endpoints. These are compatible with common tools including:

• Hardhat
• Foundry
• Wagmi
• Viem

Circle also provides platform services such as Circle Wallets and SDKs. These abstract blockchain complexity and support use cases like micropayments and cross-chain workflows.

Cross-Chain Liquidity: CCTP, Gateway, and the Circle Stack

Arc integrates Circle‘s cross-chain stack natively to keep USDC liquidity unified. The two core primitives are CCTP and Gateway, and both operate as native interoperability tools on the chain:

• CCTP, the Cross-Chain Transfer Protocol, handles canonical USDC transfers and cross-chain message passing. It moves native USDC between Arc and other chains without wrapped assets.
• Gateway consolidates cross-chain balances into a single unified USDC balance. This lets applications operate from one address across multiple networks.

Combined with sub-second finality and predictable fees, these tools position Arc as a settlement hub. Every CCTP-supported chain becomes a distribution channel that routes liquidity into one high-speed environment.

The ARC Token

The ARC token is the native coordination asset that will support governance, security, and network operations on Arc.

The $222M Presale and $3B Valuation

Circle raised $222M in a private ARC presale. The round placed 740M tokens at $0.30 each, about 7.4% of the initial supply, and set a $3B fully diluted valuation.

Andreessen Horowitz (a16z crypto) led the round with $75M. This marked the first time a publicly listed company conducted a token presale ahead of a blockchain launch, since Circle trades on the NYSE under CRCL.

Token Supply and Allocation

Arc has a proposed initial supply of 10B tokens. The allocation splits across three groups.

Allocation	Share	Purpose
Ecosystem	60%	Developers, users, and contributors who build on and use Arc
Circle	25%	Operating validator nodes, staking, protocol development and governance
Reserve	15%	Long-term reserve for future ecosystem growth

The 60% ecosystem allocation targets network growth and developer incentives. Circle‘s 25% enables it to run validator infrastructure and participate in staking.

Governance and Staking

The ARC token is designed to support governance, security, and network operations. The whitepaper outlines how a native coordination asset could underpin these functions.

Arc begins with a permissioned proof-of-authority validator set. Circle‘s 25% allocation lets it operate validator nodes and governance, with a portion designated for staking and inflationary rewards. Some dilution-determining parameters were left to a future governance vote. This means parts of the tokenomics remain undecided pending community input.

What Can Be Built on Arc?

Arc targets financial applications that need predictable costs, fast settlement, and compliance features. The use cases cluster around payments, FX, and tokenized assets.

Payments and Cross-Border Settlement

Arc is built for payments and cross-border settlement at enterprise scale. Sub-second finality and dollar-denominated fees suit high-volume money movement.

Typical applications include:

• Cross-border payouts and remittances
• Merchant settlement
• B2B invoice settlement
• Treasury movement across chains

The CCTP and Gateway integration supports these use cases by unifying liquidity. Funds arriving from slower-finality chains can settle into a single Arc balance.

FX and Capital Markets / RWAs

Arc supports foreign exchange and capital markets activity through StableFX and its settlement contracts. Payment-versus-payment settlement handles both legs of a currency trade at once.

For tokenized real-world assets (RWAs), institutions have already begun testing. BlackRock tested tokenized asset settlement on the Arc testnet.

Additional capital markets use cases include:

• Tokenized fund issuance
• FX hedging
• Escrow-based settlement workflows

Who Is Arc Network For?

Arc targets developers, fintechs, enterprises, and financial institutions that want stablecoin-native infrastructure. The chain is aimed at organizations moving dollar-denominated value at scale.

The public testnet drew 100+ institutional participants. Named testers include BlackRock, Visa, Goldman Sachs and AWS.

Retail users can also interact with Arc applications once mainnet opens. For now, participation centers on developers building on testnet and institutions evaluating settlement.

Arc vs Ethereum, Solana, and Plasma

Arc competes in a market with both general-purpose chains and stablecoin-specific rivals. The clearest contrast is with Ethereum and Solana on one side and Plasma on the other.

Feature	Arc	Ethereum	Solana	Plasma
Purpose	Stablecoin finance	General-purpose	General-purpose	Stablecoin payments
Gas token	USDC	ETH	SOL	XPL / USDT
Consensus	Malachite (Tendermint BFT)	Proof-of-stake	Proof-of-stake / PoH	PlasmaBFT
Finality	Deterministic, sub-1s	Probabilistic	Sub-second	Sub-1s
EVM compatible	Yes	Yes	No	Yes
Status	Testnet, mainnet 2026	Live	Live	Mainnet since Sep 25, 2025
Issuer / backer	Circle	Ethereum Foundation	Solana Labs	Tether / Bitfinex

Ethereum and Solana support stablecoins as one asset type among their broader ecosystems. Arc and Plasma treat stablecoins as the primary value unit.

How to Get Started With Arc Network

Developers can begin building on Arc today through the public testnet. The onboarding uses standard Ethereum workflows with minor configuration changes.

The typical steps are:

1. Point your development environment to Arc‘s testnet RPC endpoints.
2. Deploy Solidity contracts using Hardhat, Foundry, or similar tools.
3. Integrate Circle platform services such as Circle Wallets and SDKs as needed.
4. Test cross-chain transfers using CCTP and Gateway.
5. Request early access through the official Arc website and monitor for mainnet beta in 2026.

Institutions can request access to features like StableFX, which is available to approved organizations. For staking participation once mainnet opens, established validators offer a route in.

Everstake is a non-custodial validator that has historically operated 130+ networks, onboarding over 1.6M institutional and retail customers. 

Everstake holds SOC 2 Type II, ISO 27001:2022, and NIST CSF certifications, and recently we’ve completed the independent DORA controls assessment, covering ICT risk governance, incident reporting, operational resilience testing, and oversight of third-party technology providers.

As a reliable staking provider, Everstake tracks emerging networks like Arc and could explore white-label solutions with institutions seeking validator infrastructure as new chains reach production.

FAQ

What is an Arc network?

Arc is an open Layer-1 blockchain built by Circle for stablecoin finance. It uses USDC as its native gas token and targets payments, settlement, and FX.

Who created the Arc network?

Circle, the issuer of USDC, created Arc. Circle trades on the NYSE under the ticker CRCL and announced Arc in August 2025.

When does Arc mainnet launch?

Arc mainnet beta is expected in 2026. The public testnet launched on October 28, 2025, and full production timing depends on testnet results and regulatory readiness.

What token does Arc network use?

Arc uses USDC as its native gas token for transaction fees. The ARC token serves as a separate coordination asset for governance, security, and network operations. Arc is not live as of July 2026.

How much did the ARC presale raise?

Circle raised $222M in the ARC token presale. The round valued the network at $3B fully diluted and was led by a16z with $75M.

How is Arc network different from Plasma?

Arc centers on USDC and adds a built-in FX engine (StableFX), while Plasma centers on USDT with zero-fee transfers. Arc uses Malachite consensus; Plasma uses PlasmaBFT and anchors to Bitcoin.

Can I stake on Arc network?

Staking is available from day one. The validator set is expected to expand over time as the network decentralizes.

Is Arc EVM-compatible?

Yes, Arc is EVM-compatible. Developers can deploy Solidity contracts using tools such as Hardhat, Foundry, Wagmi, and Viem.

How to run the Arc validator?

Currently, the participation is limited to a permissioned set of operators only. However, eligible institutions can explore a white-label solution for a dedicated Arc infrastructure with Everstake.