- Circle will launch Arc, an EVM-compatible layer-1 blockchain with USDC as native gas, focused on stablecoin finance and enterprise-grade applications.
- Despite a 53% YoY revenue jump in Q2, Circle reported a $482M loss, mostly from IPO-related non-cash expenses.
- Arc’s debut follows a wave of new blockchain launches by major fintech and crypto firms, marking a shift toward in-house infrastructure.
Circle, the publicly traded issuer of the USDC stablecoin, is stepping into the blockchain infrastructure race with plans to launch its own layer-1 network, Arc, later this year. Fully compatible with the Ethereum Virtual Machine (EVM), Arc is designed as an enterprise-grade platform for stablecoin payments, foreign exchange, and capital market applications — aiming to blend speed, compliance, and scalability in one ecosystem.
Arc’s Vision and Key Features
Set to debut in a public testnet, Arc will break from tradition by using USDC as its native gas token, letting users cover transaction fees directly in stablecoins. Circle says Arc is “purpose-built for stablecoin finance,” integrating features like:
- A built-in stablecoin FX engine
- Sub-second settlement finality
- Opt-in privacy controls for sensitive transactions
Arc will be fully tied into Circle’s existing suite of products while remaining interoperable with two dozen other partner blockchains already supporting USDC, which currently has a market cap of $65.6 billion. Ethereum remains USDC’s largest host network with $42.6 billion in supply.
Strong Financials Shadowed by IPO Costs
Circle’s second-quarter report painted a mixed picture. While total revenue and reserve income jumped 53% year-over-year to $658 million, the company recorded a net loss of $482 million — largely due to its IPO. According to Circle, $591 million of non-cash charges tied to going public weighed heavily on results, including:
- $424 million in stock-based compensation
- $167 million from the rising fair value of convertible debt as its stock price surged
Circle raised $1.05 billion during its NYSE debut on June 5, starting at $69 per share before rocketing to $292.8 later that month. Since then, the stock has cooled, closing at $161.2 on Monday — still well above its IPO price.
Industry Context: Big Players Enter the Blockchain Arena
Arc’s unveiling is part of a broader trend where both crypto natives and TradFi giants are launching their own networks. Just this week, Stripe was reported to be building Tempo, a new blockchain in partnership with Paradigm. In June, Robinhood announced a layer-2 tokenization network, while Shopify began enabling USDC payments via Coinbase’s Base chain.
Circle’s move not only strengthens its grip on the stablecoin market but also positions it as a direct infrastructure player — one that’s betting big on stablecoin-native ecosystems.
