Why Arc Might Change the Way We Use Stablecoins

Circle, the company behind USDC, has unveiled a new blockchain called Arc. Unlike Ethereum or Solana, Arc is designed specifically for stablecoins, aiming to enhance their utility for large enterprises.

The Need for Arc

Stablecoins are digital currencies pegged to real-world assets like the US dollar. However, current blockchains present challenges:

• Unpredictable fees
• Uncertain transactions
• Lack of privacy

Arc addresses these issues by offering:

• Fast, irreversible transactions
• Stable fees
• Regulatory-compliant privacy options
• Seamless interoperability with other blockchains and traditional finance systems

Rollout Plan

Arc is being introduced in phases:

1. Private testnet – August 2025
2. Public testnet – Fall 2025
3. Mainnet beta – 2026

Key Features

• USDC as Native Gas: Eliminates reliance on volatile tokens for transaction fees.
• Predictable Fee Model: Designed to keep costs low and stable.
• Malachite Consensus Layer: Ensures security and fairness, transitioning from a permissioned system to Proof-of-Stake.
• Privacy Options: Balances compliance with confidentiality, allowing institutions to disclose data when required.
• Fiat & USDC Connectivity: Tools for seamless movement of funds across Arc and other blockchains.

Competitive Edge

Arc enters a competitive market, but Circle’s strong position with USDC gives it an advantage. The blockchain aims to expand stablecoin utility beyond payments into real-time settlement, tokenization, and global capital markets.