Circle announced it was rolling out Arc, an open and EVM-compatible Layer 1 blockchain focused on capital markets and stablecoin payments. The new protocol will use USDC as its native token to facilitate compliant cross-border payments.
Circle Internet Group disclosed that Arc will also be designed purposely for foreign exchange and delivering finality for sub-second settlement. It will further deliver opt-in privacy features and integrate fully with Circle’s ecosystem. A public testnet will be launched this fall.
Jeremy Allaire, Circle’s co-founder and CEO, said the company’s June IPO marked “a pivotal moment” for both the company and the broader stablecoin adoption. Circle reported that USDC circulation was up 90% YoY, surpassing $61B in Q2.
The company had a total revenue and reserve income of $658M, an increase of about 53%. However, it posted a loss of $482M, mainly due to non-cash charges related to the IPO amounting to $591M. Circle has a USDC market share of 28% and its adjusted EBITDA surged 52% to $126M.
Allaire says Arc will fully integrate Circle’s services
The Circle CEO claimed that Arc will be fully integrated across Circle’s platform and services. Allaire added that this integration will ensure “seamless interoperability” with other existing blockchains. Arc will also support Circle’s future expansion into “enterprise-grade financial infrastructure.”
The company disclosed that Arc was part of its broader mission to expand partnerships and innovation across the banking, crypto, and payments sectors. Circle has formed key partnerships with FIS, Binance, OKX, Fiserv (FI), and Corpay (CPay). The partnerships will facilitate around-the-clock payments and liquidity to solidify Circle’s role in the digital dollar ecosystem.
Analysts reportedly view Arc as a crucial development in transforming stablecoin infrastructure. They claimed that Arc could potentially accelerate the adoption of stablecoins in DeFi and traditional finance. The analysts did not provide any supporting data for their forecasts. However, Circle is positioning itself to lead the next phase of internet money by offering a dedicated stablecoin blockchain.
“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.”
–Jeremy Allaire, Co-founder and CEO of Circle
Allaire further claimed that Arc’s unveiling was a major milestone for his company and the crypto industry in general. He pointed out that there was accelerated interest in partnering with Circle across the financial sector and building on stablecoins.
Circle launches a stablecoin payments network
Circle launched the CPN (Circle Payments Network) in May, and it has reported strong early momentum. CPN has four main active payment channels, and it is expected to accelerate growth in the stablecoin sector in the second half of this year. Circle added that the all-new CPN will partner with over 100 financial institutions in the pipeline. There are also plans to open additional payment corridors and include enterprise-centric capabilities for the protocol.
The payment network will also connect financial institutions and facilitate real-time settlement of cross-border payments in EURC, USDC, or other regulated stablecoins. Participants may include digital wallet operators, neobanks, FinTechs, banks, and payment service providers. Circle said these institutions can send and receive funds worldwide in real-time. However, CPNs do not move money between bank accounts traditionally. The marketplace coordinates how stablecoins move between network participants. It also orchestrates information exchange across the world.
Circle stressed that CPN can be viewed as an orchestration layer that directs participants on how (and when) to transfer tokens to complete transactions. Circle will act as the network’s operator, defining the rules and providing APIs for participants to plug into. The company’s vision is to have CPN as a framework that developers can build upon. If successful, CPN could eventually help Circle play custodian to stablecoin reserves and customer deposits. The company could then offer banking services like lending under supervised bank regulations.
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