Circle to Launch Arc Blockchain with USDC as Gas Token

Circle, the publicly traded U.S. company behind the USDC stablecoin, has announced plans to launch Arc. Arc is a new enterprise-grade Layer-1 blockchain compatible with the Ethereum Virtual Machine (EVM) that will be launched later this year. The move aims to strengthen Circle’s role in stablecoin payments, foreign exchange, and capital markets infrastructure.

Revealed alongside its Q2 earnings on Tuesday, Arc will debut in a public testnet phase, with USDC integrated as the blockchain’s native gas token. This will allow users to pay transaction fees directly in the stablecoin. The network will also feature a built-in stablecoin foreign exchange engine, sub-second settlement times, and optional privacy controls.

Circle described Arc as “purpose-built for stablecoin finance,” positioning it as a core part of its ambition to deliver a “full-stack platform for the internet financial system.” The blockchain will be fully integrated with Circle’s existing platform and remain interoperable with the 24 other blockchains currently supporting USDC.

As of now, USDC has a market capitalization of $65.6 billion, with $42.6 billion circulating on Ethereum, its largest network by supply.

In its Q2 financial report, Circle posted a 53% year-over-year increase in total revenue and reserve income, reaching $658 million. However, the company also reported a net loss of $482 million for the quarter, a sharp rise from the $33 million loss recorded in Q4 2024.

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Circle attributed the steep loss primarily to non-cash charges related to its initial public offering (IPO). This included $424 million in stock-based compensation tied to vesting conditions and a $167 million increase in the fair value of convertible debt due to the rise in Circle’s share price.

The company raised $1.05 billion in its IPO and began trading on the New York Stock Exchange on June 5 at $69 per share. The stock quickly surged to an all-time high of $292.8 on June 23 but has since retreated, closing at $161.2 on Monday, down more than 21% over the past month.

With Arc set to launch later this year, Circle is positioning itself to expand beyond stablecoin issuance into blockchain infrastructure, potentially reshaping how digital dollar transactions are settled and integrated into global finance.