Circle Drops Arc: A Game-Changing Layer 1 Blockchain Built for Stablecoin Dominance

Stablecoin giant Circle just fired a shot across the crypto ecosystem—introducing Arc, a purpose-built Layer 1 blockchain designed to put dollar-pegged assets center stage.

Why it matters: While Ethereum struggles with gas fees and Solana grapples with uptime, Arc arrives pre-optimized for the one crypto use case that's actually gone mainstream: stablecoins. No more jury-rigged smart contracts or bridged assets—just native support for the $150B+ stablecoin market.

The cynical take: Another blockchain? Really? But when your company issues the second-largest stablecoin (USDC), you get to ignore the 'we don't need more L1s' crowd. Especially when TradFi institutions keep begging for a compliant on-ramp.

What's next: Watch for the inevitable 'Arc vs. XRP Ledger' stablecoin wars—because nothing says progress like financial giants fighting over who gets to digitize the dollar more efficiently.

USDC as Core Infrastructure

Circle USDC, the most trusted U.S. dollar-pegged stablecoin in the world today, has a market share of 260 billion globally, with USDC representing 65 billion of those stablecoins. By picking USDC as the default currency for Arc Gas, Circle is strengthening its USDC vision as both a means of exchange and, more importantly, a centralized utility asset for next-generation financial applications.

EVM compatibility means that developers can access the same tools and familiar Ethereum-based tooling they are used to, but with the benefit of a production-grade system architecture at Circle.

Growing Momentum Across the Industry

Circle is not the first to make such a move. Stablecoin-focused blockchains (Stable and Plasma) are also being supported by Tether, the world’s largest stablecoin issuer, which is a sign of growing interest in tailored infrastructure to support the specific needs of fiat-backed digital assets.

The announcement of Arc is accompanied by the publicity of the Q2 2025 financial outcomes of Circle, which show great momentum in the business processes. Circulating supply of USDC increased by 90% on a year-over-year basis to a Q2 peak of $61.3 billion, rising further since then to $65.2 billion as of August 10. Total revenue and reserve revenue increased by 53% to 658 million, and other revenue grew daily by 252%. Furthermore, adjusted EBITDA ROSE 52% to $126 million, which demonstrates strong financial progress in the major business units.

Circle (CRCL) stock jumped over 14% as it hit $189 in early trading on Tuesday morning after the stablecoin issuer posted better-than-expected quarterly revenue for the first time since going public.

In spite of this excellent performance, Circle realized a net loss of 482 million, which was mainly caused by 591 million of non-cash IPO-related expenses, such as $424 million of stock-based compensation and $167 million of the revaluation of convertible debt.

Regulatory Momentum: GENIUS Act Signed into Law

Circle also shared a parallel event noting the significance of the recently signed GENIUS Act, which implements a federal regulatory framework on payment stablecoins and was signed into law by President Trump. According to Circle, the Act formalizes much of the compliance that the firm has long operated under and places it in the leadership position as a regulated stablecoin issuer in the United States.

Upcoming Earnings Call

Circle will report Q2 2025 earnings on Tuesday, August 12, at 8:00 a.m. ET, and the company executives will provide additional details about the Arc roadmap and business perspective. 

Also Read: Visa’s crypto Chief Eyes Slice of $2 Trillion Stablecoin Marke