Circle Launches Arc, a New Layer 1 Blockchain

Circle has announced the launch of Arc, a Layer 1 blockchain that focuses on stablecoin transactions, after its booming $1.2 billion IPO in June. Expected to debut on public testnet this fall, Arc will be EVM-compatible and aims to support stablecoin payments, foreign exchange, and capital markets applications. The new blockchain will utilize USDC as its native gas token and feature a stablecoin FX engine for rapid transactions, settlement times of under a second, and optional privacy. It will fully integrate with Circle's existing platform and maintain interoperability with partner blockchains. As the second-largest stablecoin issuer, Circle represents $65 billion of the estimated $260 billion total supply in the U.S. dollar-pegged stablecoin market, according to The Block's data dashboard. The surge in interest in stablecoin-centric blockchains is evident, with Tether, the market leader, also investing in multiple blockchain projects. In the backdrop of this launch, Circle reported significant growth in its second-quarter financial results, with USDC circulation expanding by 90% year-over-year to $61.3 billion. Revenue surged by 53% to $658 million, although it reported a net loss of $482 million due to IPO-related expenses. CEO Jeremy Allaire touted the company’s strong performance and its implications for the broader adoption of stablecoins. He remarked that the successful IPO signifies a transformative moment for both Circle and the stablecoin industry as a whole. Circle also noted the importance of the recent GENIUS Act in establishing a regulatory framework for payment stablecoins, enhancing its position as a regulated stablecoin issuer. Following this news, Circle's stock rose by 6.2% in pre-market trading.