Circle, the issuer of the USDC stablecoin, has launched the public testnet for its Arc blockchain, a new Layer-1 network designed to power the next era of on-chain finance. With over 100 major institutions already participating, including BlackRock, Visa, HSBC, Deutsche Bank, and Coinbase, Arc represents a significant step in merging traditional financial infrastructure with blockchain technology.
Arc is built for stability and speed, featuring sub-second settlement capabilities that enable near-instant global money transfers. Every transaction on the network uses USDC as native gas, creating predictable, fiat-denominated costs that appeal to enterprises wary of crypto volatility. The blockchain is EVM-compatible, allowing developers to deploy existing Ethereum-based smart contracts and tools without modification, which lowers adoption barriers.
Key features include a built-in foreign exchange (FX) engine that supports 24/7 on-chain swaps between stablecoins via an institutional-grade request-for-quote (RFQ) system, facilitating seamless cross-currency settlement and real-time price discovery. For privacy, opt-in confidentiality features let firms hide sensitive transaction details while maintaining regulatory compliance.
Participants span traditional finance (e.g., BlackRock, HSBC, Société Générale, State Street, Standard Chartered), payments and technology (e.g., Visa, Mastercard, AWS), and fintech and crypto firms (e.g., Coinbase, Kraken, Fireblocks). Circle has outlined plans to decentralize Arc over time, eventually opening validator participation and governance to external stakeholders, aiming to transform it into a public, institution-grade blockchain for real-world asset tokenization, on-chain payments, and global liquidity flows.
In a related development, ClearBank joined the Circle Payments Network (CPN), enabling clients to access Circle's MiCA-compliant stablecoins, including USDC and EURC, further enhancing cross-border payments in Europe.
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