Circle Launches Arc: The USDC-Gas Layer 1 Built for Wall Street and AI Agents

Circle opened the public mainnet of Arc; an EVM-compatible Layer 1 assigned Chain ID 5042 and built for stablecoin settlement, foreign exchange and tokenized capital markets. Eleven founding validators run the permissioned consensus layer: BlackRock, DTCC, Galaxy, Global Payments, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation and Visa. USDC serves as the native gas token so fees are dollar-denominated, while ARC is a separate staking and governance token whose presale raised $222 million at a $3 billion fully diluted valuation, led by a16z crypto with BlackRock, Apollo and ARK Invest participating. Consensus runs on Malachite, a Tendermint-derived Byzantine fault tolerant engine Circle acquired from Informal Systems, targeting deterministic finality under 500 milliseconds and around 3,000 transactions per second, with execution handled by Reth. The application layer is permissionless and anyone can deploy contracts without Circle's approval, while Circle's own launch disclaimer describes the network as operated by a permissioned validator set. DTCC will begin tokenizing DTC-custodied assets on Arc in 2027 and BlackRock plans to deploy its $2.87 billion BUIDL fund natively on the network.

 

 

Circle earned 95.2% of its second-quarter 2026 revenue from interest on the reserves backing USDC, which is a profitable position. Arc is the company's answer to that concentration. The public mainnet opened on September 16 after roughly eleven months of development, following an August 2025 announcement, a public testnet in October 2025 that processed more than 700 million transactions across 2.8 million wallets, and a private mainnet phase involving over 100 institutional and ecosystem builders. Jeremy Allaire, Circle's co-founder and chief executive, described the premise as the global financial system deserving a blockchain network it can trust, and the validator list is the clearest expression of what that means in practice. Eleven institutions drawn almost entirely from traditional finance now run the consensus layer, including the operator of the New York Stock Exchange and the depository that holds most US securities.

 

 

 

Arc went live as a public Layer 1 with Chain ID 5042, fully EVM-compatible and open for permissionless contract deployment. Circle first introduced it on August 12, 2025 as a chain purpose-built for stablecoin finance, framing it against three limits of general-purpose networks: volatile gas tokens, probabilistic finality and public-by-default transfers.

The founding validator cohort, named on August 5, 2026, is where Arc differs most from anything that preceded it. BlackRock, DTCC, Galaxy, Global Payments, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation and Visa all run nodes, with Circle alongside them. That is the most institutionally concentrated validator set assembled for a public Layer 1 launch, and it includes the parent of the New York Stock Exchange and the Depository Trust and Clearing Corporation. More than 100 companies across payments, markets, custody and on-chain applications participated in the private mainnet phase, and Allaire has said those firms reach billions of users across Africa, the Americas, Asia, Europe and the Middle East. The testnet numbers are large and carry the caveat that testnet activity measures a simulated environment instead of how a network behaves once real economic value moves through it.

 

Transaction fees on Arc are paid in USDC, which means a transaction costing a fraction of a cent today costs the same fraction tomorrow regardless of what crypto markets do. For a treasury team, on-chain activity becomes a predictable operating expense. Circle also modified Ethereum's EIP-1559 fee mechanism to smooth costs further. Instead of the base fee adjusting sharply from one block to the next, Arc applies a weighted moving average of network demand, which dampens the spikes that make fee forecasting difficult on congested chains.

Arc does have a native token. ARC is the network's staking and governance asset, separate from the USDC that pays for gas. Its presale raised $222 million at a $3 billion fully diluted valuation, led by a16z crypto with BlackRock, Apollo and ARK Invest among the participants. Total initial supply is 10 billion tokens, with Circle holding 25%, 60% allocated to ecosystem development and 15% held in a long-term reserve. Arc removes token volatility from the cost of using the network without removing the token.

 

Arc separates consensus from execution, which is how it reaches settlement speeds that traditional finance can work with. Consensus runs on Malachite, a Tendermint-derived Byzantine fault tolerant engine built by the team at Informal Systems and acquired by Circle. It delivers deterministic finality under 500 milliseconds, targeting throughput around 3,000 transactions per second. Deterministic means a block is permanently committed once validators agree, with no probabilistic confirmation window and no chain reorganisation risk. For institutional settlement that property does specific work, because probabilistic finality introduces legal and accounting ambiguity about when a transfer has actually occurred, and treasury and foreign exchange operations cannot carry that ambiguity. Execution and state maintenance run on Reth, a high-performance Rust-based Ethereum client. Because Arc is fully EVM-compatible, existing Solidity contracts and standard tooling including Foundry, Hardhat and MetaMask work from the first block without modification, so a team already building on Ethereum can deploy to Arc without rewriting anything.

 

Circle's own launch disclaimer describes Arc as operated by a permissioned validator set. The application layer is genuinely permissionless, meaning anyone can deploy contracts without Circle's approval, and anyone can run a full node to independently verify transactions against validator signatures. The consensus layer is explicitly permissioned, with the eleven validators chosen by Circle. The reason is architectural instead of ideological. Classical Byzantine fault tolerant systems achieve deterministic finality by requiring a known, bounded set of participants, and the Tendermint protocol Malachite is built on was never designed for open validator participation at Bitcoin or Ethereum scale. It was designed for exactly this use case. Deterministic sub-second finality and an open validator set are not available at the same time in this class of system, so a network promising the first has necessarily traded away the second. Whether that makes Arc a blockchain or a private settlement rail with blockchain properties is a fair question, and the accurate answer is that it sits between the two in a way the architecture explains. Institutions moving balance-sheet activity on-chain want identifiable, regulated entities producing blocks, and that requirement is what the validator list delivers.

 

Arc opened with more than 100 applications and more than 100 institutional and ecosystem builders live, spanning global banks, asset managers, payment networks, exchanges, custodians, DeFi protocols, wallets and AI platforms. Allaire called it the single most significant launch in Circle's history since USDC itself.

 

 

The asset layer is what gives the network something to transact. Circle's USYC tokenized money market fund, the Securitize-tokenized BUIDL treasury fund and private credit funds all supply assets to trade, lend and post as collateral. Alongside them sits cirBTC, Circle's institutional-grade programmable bitcoin, convertible one-to-one from BTC, cbBTC or wBTC without fees, with reserves independently verifiable on-chain in real time.

Credit markets are anchored by Aave and Morpho. Aave Labs founder and chief executive Stani Kulechov said the firm is doubling down on the Circle ecosystem with a new Aave V4 market on Arc. Bitwise, Cumberland, Dialectic, Galaxy, Gauntlet, Keyrock and Steakhouse Financial support those markets through curated vault strategies, risk oversight and supplying USDC and EURC for borrowing and lending.

Trading and liquidity arrived broad. 1inch, Aero, Bankr, Dinari, Doppler, edgeX, Extended, fomo, Hibachi, LI.FI, o1.exchange, pools.trade, Pump.fun, Robinhood and Uniswap cover spot trading, structured products, perpetuals and cross-chain execution, with Aero, fomo and Uniswap anchoring day-one trading infrastructure. Distribution came through the wallets people already hold. Binance Wallet, Bitget Wallet, Gate Web3, Kucoin Web3, Ledger, MetaMask, OKX Wallet, Phantom, Rainbow and Trust Wallet all support Arc from launch, which puts the network in front of hundreds of millions of existing users without anyone installing anything new. Circle's CCTP and Gateway add interoperability with more than 20 chains, and USDC circulation now exceeds $74 billion.

The institutional commitments extend past what is live. The DTCC will begin tokenizing DTC-custodied assets on Arc in 2027, placing the institution at the centre of US securities settlement onto a public chain, and BlackRock plans to deploy its $2.87 billion BUIDL fund natively on the network. Circle completed a genesis mint of 10 billion ARC tokens in the United States during launch week. The roadmap points in two directions; Circle has previewed future network sectors covering confidential transactions, higher-throughput payments and verifiable agent activity, and it has signalled a possible move toward proof of stake in 2027, which would change the permission structure described above. Arc also went live into a wider institutional moment, with Deutsche Bank announcing on the same day that it would launch digital-asset custody for institutional and corporate clients in Europe, supporting Bitcoin, Ether and a limited set of stablecoins including USDC.

 

The agent case for Arc rests on infrastructure Circle already shipped and usage it can already measure. Circle launched Agent Stack in May 2026 as chain- and protocol-agnostic infrastructure for the agentic economy, built around five components. Agent Wallets are programmable USDC wallets with global spending limits, per-service caps, contract and chain allowlists, and time-bounded sessions, so an agent holds funds under constraints its operator defines. Agent Marketplace is a directory where agents discover, evaluate and pay for services, listing more than 900 paid endpoints by the end of the second quarter. Nanopayments, powered by Circle Gateway, handle gasless USDC transfers at sub-cent scale, and since USDC carries six decimals a payment of 8,000 units is 0.008 dollars. Circle CLI manages agent wallets and skills from any agent framework, and Circle Skills are open-source modules giving agents specialised knowledge of Circle products. The documentation names Claude Code, Cursor, Codex and OpenClaw among the frameworks it works with.

The mechanism that makes it work is embedding payment inside the request. An agent asks for a resource, receives an HTTP 402 Payment Required response, pays in USDC and continues the task, with access and payment happening in one step instead of through separate billing and authentication flows. In August, Circle added a Discovery API giving agents programmatic access to the marketplace catalogue through a single public endpoint with no API key, no authentication and no Circle account required. An agent queries by category, blockchain or pricing structure and calls the relevant endpoint directly over HTTP without registering first.

As of April 29, x402 had processed $24.24 million in the prior 30 days with 99.8% of transaction value settling in USDC, and across Circle's second quarter 99.3% of x402 agent-payment volume settled in USDC. Total USDC circulation reached $73.3 billion at quarter end, up 19% year over year, on quarterly transaction volume of $14.8 trillion, a 151% increase. Agents converged on dollar-denominated settlement before Arc existed, and Circle's roadmap now extends past agents making payments toward tools that let them earn income.

Arc's properties map onto what those workloads need. Deterministic finality under 500 milliseconds means an agent knows a payment has settled instead of probably settled, which matters when the next decision depends on the previous one having cleared. USDC gas means an agent calculating its operational runway does so in dollars, without modelling a network token alongside everything else.

 

Circle's business has been concentrated in one revenue line, with reserve income accounting for 95.2% of second-quarter 2026 revenue. That income depends on interest rates the company does not control, and Arc is the most significant product release since USDC itself and a direct attempt to diversify. Owning the settlement layer changes Circle's position from issuing a stablecoin that settles on other people's chains to operating the network where the settlement happens. Transaction fees, ecosystem value and the strategic position of being infrastructure instead of an asset all follow from that.

 

Arc is an EVM-compatible Layer 1 blockchain, built by Circle for stablecoin settlement, foreign exchange and tokenized capital markets. Its public mainnet opened on September 16, 2026, after an August 2025 announcement, a public testnet in October 2025 and a private mainnet phase involving more than 100 institutional and ecosystem builders.

Gas is paid in USDC, so fees are dollar-denominated and predictable instead of varying with a volatile native token. Circle also modified Ethereum's EIP-1559 mechanism to apply a weighted moving average of network demand, which smooths the base fee across blocks.

Yes. ARC is the network's staking and governance token, separate from the USDC used for gas. Its presale raised $222 million at a $3 billion fully diluted valuation, led by a16z crypto with BlackRock, Apollo and ARK Invest participating. Total initial supply is 10 billion tokens, with Circle holding 25%, 60% for ecosystem development and 15% in a long-term reserve.

Eleven founding institutional validators: BlackRock, DTCC, Galaxy, Global Payments, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation and Visa, alongside Circle. They are permissioned and chosen by Circle. Anyone can run a full node to verify transactions independently, and anyone can deploy contracts without approval.

Malachite, a Tendermint-derived Byzantine fault tolerant engine Circle acquired from Informal Systems, delivers deterministic finality under 500 milliseconds with throughput targeted around 3,000 transactions per second. Deterministic finality means a block is permanently committed once validators agree, with no probabilistic confirmation window and no reorganisation risk.

The DTCC will begin tokenizing DTC-custodied assets on Arc in 2027, and BlackRock plans to deploy its $2.87 billion BUIDL fund natively on the network. More than 100 ecosystem participants across DeFi, payments and wallets were active at launch.

Circle launched Agent Stack in May 2026, built around Agent Wallets with programmable spending controls, an Agent Marketplace listing more than 900 paid endpoints, gasless sub-cent Nanopayments through Circle Gateway, a command-line tool and open-source Skills. Across Circle's second quarter, 99.3% of x402 agent-payment volume settled in USDC. Deterministic sub-second finality lets an agent know a payment has settled before acting on it, and USDC gas lets an agent calculate operational costs in dollars without modelling a volatile token.