Circle, one of the major issuers of USDC (Stablecoins) reportedly unveiled plans for its own stablecoin-focused Layer 1 blockchain Arc on Tuesday, expected to launch on public testnet this fall.
The EVM-compatible chain is designed to provide an enterprise-grade foundation for stablecoin payments, FX, and capital markets applications, according to a press release.
Arc will use USDC -0.00% as native gas include a stablecoin FX engine, sub-second settlement, and opt-in privacy, while fully integrating with Circle’s platform and maintaining interoperability with other partner blockchains, the firm said.
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“I’m proud of Circle’s performance in the second quarter, our first as a public company, where we demonstrated sustained growth and adoption of our platform across a multitude of use cases and with a diverse set of industry-defining partners,” Circle co-founder, CEO, and Chairman Jeremy Allaire said.
“Circle’s successful IPO in June marked a pivotal moment — not just for our company, but for the broader adoption of stablecoins and the growth of the new internet financial system,” he added. “This is an extraordinary moment for our company and industry, and we are seeing accelerating interest in building on stablecoins and partnering with Circle across every significant sector of the financial industry, with major internet companies and commercial engagement all around the world.”
The news comes amid the release of Circle’s second-quarter financial results on Tuesday.
What is stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a consistent value by being pegged to a stable asset, usually a fiat currency like the U.S. dollar or a commodity such as gold. This peg helps reduce the price volatility commonly seen with cryptocurrencies like Bitcoin or Ethereum, making stablecoins more practical for everyday use including payments, savings, and transferring money. Stablecoins can be backed by actual reserves, such as cash or other assets, or use technology to control their supply and keep their price stable.
There are three main types of stablecoins: fiat-collateralized, crypto-collateralized, and algorithmic. Fiat-collateralized stablecoins are backed 1:1 by government currencies held in reserve, offering straightforward stability (e.g., USDT, USDC). Crypto-collateralized stablecoins use cryptocurrencies as collateral but require excess backing due to the volatility of crypto assets. Algorithmic stablecoins maintain stability through automated supply adjustments without reserves, relying on market mechanisms. Stablecoins serve as a bridge between traditional finance and cryptocurrencies, providing users with the security of blockchain technology while minimizing price fluctuations, which helps drive adoption in the digital economy.
READ: Stablecoin issuer Circle files for IPO, eyes $5 billion valuation (April 2, 2025)
What is Circle?
In the context of stablecoins and cryptocurrency, Circle is a financial technology company best known for creating and managing USD Coin (USDC), one of the largest and most widely used fiat-collateralized stablecoins. Founded in 2013, Circle aims to provide transparent, secure, and efficient digital currency solutions that bridge traditional finance and blockchain technology.
USD Coin (USDC), issued by Circle in partnership with Coinbase under the governance of the Centre Consortium, is pegged 1:1 to the U.S. dollar. Each USDC token is backed by an equivalent amount of U.S. dollars or dollar-denominated assets held in reserve, which are regularly audited to ensure transparency. Circle focuses heavily on compliance, regulatory standards, and financial transparency, making USDC a trusted stablecoin choice for businesses, investors, and developers globally. It is widely used for payments, trading, remittances, and decentralized finance (DeFi) applications, offering the stability of the U.S. dollar combined with the benefits of blockchain technology.