Circle introduced Arc as an open Layer-1 stablecoin specifically designed for finance. The company is offering it to banks after testnet metrics showed settlements in 0.5 seconds.
Circle presents Arc as the definitive answer to settlement delays, boasting a testnet that delivered settlement times close to 0.5 seconds and successfully processing over 150 million transactions across 1.5 million different wallets within a 90-day period.
Arc utilizes its proprietary engine called Malachite, confirms its compatibility with EVM for developers, and claims the capacity to handle millions of transactions per second globally.
Another key point is that Circle launched Arc with a strong emphasis on enterprise applications. As an example of this success, CPN has onboarded 29 institutions and executes $3.4 billion annually for these companies.
Another example is StableFX, deployed on the Arc testnet, which offers 24/7 institutional FX trading with stablecoins and immediate settlement.
Competition and adoption challenges for Circle
Arc faces significant competitive pressure from established stablecoin issuers and proprietary platforms led by banks. Circle acknowledges Tether’s dominant market share (60.1%) as a competitive reality and recognizes banking projects from large financial institutions.
To mitigate these pressures, Circle emphasizes openness, an integrated ecosystem (Arc, CPN, StableFX), and institutional pilot programs that include major banks and payment companies.
Circle also leverages its Cross-Chain Transfer Protocol (CCTP) infrastructure, which has handled cumulative volumes that the company reported at $126 billion as of December 2025, providing a pathway for USDC liquidity across networks.
For banks and treasuries, the appeal is operational, offering faster settlement, reduced pre-funding, and a single stablecoin for fees. The risks include the complexity of integration with legacy systems and an evolving regulatory landscape that still demands clear frameworks for custody, settlement purpose, and governance.
Circle is targeting a production launch for Arc in 2026. If the company converts participation in pilots and testnet performance into governed production capacity, Arc could redirect some institutional payments and FX flows to chain.
