Circle Internet Group has publicly launched Arc, its open blockchain network designed for institutional use. The stablecoin-based distributed ledger went live on its mainnet Wednesday morning after a year of development.
The launch places Arc alongside other institution-built blockchains such as Coinbase’s Base and Stripe and Paradigm’s Tempo. It arrives as U.S. digital asset regulation remains in flux following a failed procedural vote on the CLARITY Act in the Senate this week.
Circle describes the distributed ledger technology as an “economic operating system” for digital commerce.
“Arc is the single most significant launch in Circle’s history since USDC itself,” Circle co-founder and CEO Jeremy Allaire said in a statement. “It is the embodiment of the premise we have operated on for thirteen years: money should work the way the internet works.”
Predictable Fees Through USDC
Alenka Grealish, principal analyst at Celent, told American Banker that Arc is “institutional-grade” because it offers firms predictable fees. Distributed ledger technology typically requires users to pay a processing fee, or gas fee, to transact. Grealish noted that gas fees have historically required users to hold an often-volatile cryptocurrency to pay them.
“Institutions don’t want to hold a cryptocurrency,” she said. “How can Circle deliver predictable fees? In a trusted stablecoin.”
According to Circle, gas fees on Arc are paid through its dollar-backed stablecoin, USDC.
Privacy Features in Development
Grealish also highlighted Arc’s upcoming opt-in privacy features, which are still in development and not yet network-wide.
“You can’t have transaction data running on public rails and being visible,” she said. “That’s part of the beauty of Bitcoin, but it’s the beast for institutional investors.”
If Circle releases the privacy feature to the Arc mainnet, it could give banks, asset managers and other enterprises confidence to use it for sensitive transactions such as treasury, trading and confidential payments.
“The other issue with public blockchain is there’s no call center,” Grealish continued. “What happens when something fails or there’s a theft of your crypto? With Circle, they have a service infrastructure and you know who to contact. Those are kind of the pillars of what Arc is that make institutions comfortable to use it.”
Founding Validators and Participants
Starting validators for Arc include BlackRock, The Depository Trust and Clearing Corporation (DTCC), Global Payments, Mastercard, Visa, Standard Chartered and the Intercontinental Exchange (ICE).
“ICE’s institutional customers are increasingly looking for ways to operate seamlessly across traditional and digital markets,” Michael Blaugrund, vice president of strategic initiatives at ICE, said in a statement. “Arc’s native capabilities, including predictable fees and instant finality, address real friction points these customers raised. As a founding validator, ICE is applying our experience securing critical market infrastructure in support of Arc itself, reflecting our clients’ emerging demand for tokenized finance.”
BNY, HSBC, Lead Bank and State Street are also among the publicly named banks and investment firms that are either already live on or exploring Arc, according to a Circle statement.
Use Cases and Agentic Commerce
Arc’s advertised use cases include foreign exchange, international transaction settlement, capital markets trading and agentic commerce. The network is designed to work directly with AI agents, according to the company, as it prepares for a potential rise in agentic commerce activity.
Circle has been publicly exploring use cases for agentic commerce and developed various tools for it earlier this summer. The company anticipates that developers will want to pair agentic AI with other business concepts and ultimately need a rail to process payments.
Grealish told American Banker that the current use case is very small in terms of value. “You don’t cover your operating costs with those small transactions,” she said. “What you do cover it with is when you’re settling foreign exchange. Right now you have trillions of dollars daily that are traded in FX. I think it [agentic commerce] is a long-run use case, but it’s not something that will be in the top three here.”
Credibility and USDC’s Role
Nic Puckrin, cross-asset analyst and founder of Coin Bureau, told American Banker that the launch is a step towards the convergence of crypto and traditional finance, but should not be confused with mass adoption.
“The institutional giants behind it [like] BlackRock, DTCC, Visa and Mastercard are what give it credibility,” he said. The biggest beneficiary of the Arc launch, according to Puckrin, will likely be USDC itself.
“It sits at the heart of the new blockchain as its fee and settlement currency,” he said. “It makes things very simple for institutional clients. They don’t need to buy an obscure and volatile token just to use the network; they can simply use one of the world’s two largest stablecoins, which is already a staple of the digital payments landscape.”
Custody and ARC Token Mint
Circle recently acquired a national trust bank charter in anticipation of digital asset custody regulation, but other custody providers such as Anchorage Digital and BitGo are also offering custody for digital assets on Arc.
The company also confirmed that it has completed the initial mint of 10 billion ARC tokens this week in anticipation of the Arc mainnet launch. According to the company, ARC tokens are meant to be a digital commodity on the Arc network, but network fees will still remain payable in USDC stablecoins. Circle said in a statement that the mint is “not a commitment to publicly launch ARC, but an important technical milestone” as the network explores future transitions.