Arc Blockchain by Circle — An Overview
The global financial system is undergoing a profound transformation, driven by the rise of programmable money, tokenized assets, and real-time settlement networks. While blockchains have been at the center of this evolution, most existing networks still face trade-offs in speed, cost predictability, compliance readiness, and interoperability.
Arc, a new open, EVM-compatible Layer-1 blockchain, is designed to solve these challenges head-on. Built on a high-performance Byzantine Fault Tolerant (BFT) consensus known as Malachite, Arc offers deterministic sub-second finality, native stablecoin transaction fees, and a privacy-first, compliance-friendly architecture. It aims to combine the innovation of public blockchains with the security, stability, and trustworthiness required by regulated finance.
Read Arc blockchain whitepapre here.
What is Arc?
Arc is not “just another” blockchain. It is a purpose-built financial settlement layer engineered to serve as the backbone for stablecoin finance, tokenization of real-world assets (RWAs), and institutional-grade payments.
Unlike most Layer-1s that rely on probabilistic finality and volatile gas fees, Arc delivers
Finality in under one second — ensuring absolute settlement certainty with no risk of reorgs.Transaction fees in USDC — providing predictable and stable costs for businesses and institutions.Permissioned validator sets drawn from trusted entities — balancing decentralization with governance and regulatory compliance.
In short, Arc is designed for a world where global-scale finance meets blockchain programmability.
ARC Core Features
1. Stable Gas Powered by USDC
One of Arc’s most distinctive features is its native stable gas model. Transaction fees are paid in USDC by default, eliminating the volatility risk that plagues many other blockchains that use their own native tokens.
For businesses and institutions, this simplifies accounting, reduces exposure to crypto price swings, and allows for predictable operational budgeting. The architecture also supports other fiat-backed stablecoins via a paymaster mechanism, enabling localized payment options in markets worldwide.
2. Deterministic Sub-Second Finality
In traditional proof-of-work and even many proof-of-stake chains, transaction finality can be probabilistic, meaning users must wait for multiple block confirmations before considering a transaction irreversible.
Arc’s Malachite consensus delivers deterministic finality in less than one second. With 20 validators, the system reaches ~3,000 transactions per second (TPS) and ~350 milliseconds to finality. With just 4 validators, it can exceed 10,000 TPS with finality under 100 milliseconds — all on standard, commodity hardware.
This level of speed and certainty is critical for high-value financial transactions, cross-border settlements, and real-time capital markets.
3. High Throughput, Enterprise-Grade Scalability
Arc is built to handle institutional-scale transaction volumes without sacrificing security. The architecture supports throughput levels competitive with major payment processors, paving the way for integration into existing banking, trading, and payment infrastructure.
The permissioned validator model allows Arc to meet compliance requirements while maintaining high performance. Over time, governance will expand to a broader permissioned Proof-of-Stake framework to further distribute trust.
4. MEV Mitigation
Miner/Maximal Extractable Value (MEV) — the practice of reordering, inserting, or censoring transactions for profit — has been a persistent challenge in blockchain networks.
Arc takes a nuanced approach, allowing beneficial MEV (such as arbitrage that improves market efficiency) while mitigating harmful practices like front-running and sandwich attacks. Planned solutions include:
Encrypted mempools to conceal transaction order before block inclusion.Batch transaction processing to minimize reordering opportunities.Multi-proposer consensus to reduce the influence of any single validator.
5. Opt-In, Compliant Privacy
Arc introduces privacy features that are configurable and auditable — striking a balance between user confidentiality and regulatory transparency.
The initial implementation will feature confidential transfers, where transaction amounts are hidden from public view but addresses remain visible. Institutions can selectively disclose transaction data to authorized parties via “view keys,” enabling compliance with KYC/AML obligations.
Future enhancements will incorporate advanced privacy technologies including:
Trusted Execution Environments (TEEs)Multi-party computation (MPC)Fully homomorphic encryption (FHE)Zero-knowledge proofs (ZKPs) for private computations
ARC Blockchain Main Use Cases
Arc’s architecture enables a wide range of high-value applications for both traditional finance and Web3-native ecosystems.
1. Programmable Foreign Exchange (FX) and Global Payments
Arc supports the issuance and transfer of leading stablecoins such as USDC, EURC, and USYC (interest-bearing USDC). Through its programmable FX engine, Arc allows for
24/7 foreign exchange with programmable settlement.Collateralized PvP (payment-versus-payment) transactions to eliminate counterparty risk.RFQ (request-for-quote) execution layers for institutional participants.
This allows financial institutions to move funds globally with near-instant settlement and predictable costs.
2. Tokenization of Real-World Assets (RWAs)
Arc provides a compliant infrastructure for the issuance, transfer, and settlement of tokenized assets — from equities and fixed-income instruments to private credit and real estate.
By enabling interoperability with DeFi protocols, Arc creates opportunities for on-chain liquidity, collateralization, and secondary market trading of assets that have traditionally been illiquid.
3. Cross-Chain Liquidity Hub
Arc integrates seamlessly with Circle’s product suite, including Mint, Cross-Chain Transfer Protocol (CCTP), Gateway, and wallet services. This makes Arc a high-speed liquidity bridge between blockchains, enabling:
Near-instant cross-chain transfers of stablecoins.Low-cost movement of liquidity between DeFi ecosystems.Unified “digital dollar” experiences across networks.
4. Enterprise-Grade Payments & Treasury Automation
Arc’s on-chain payment primitives are built for modern enterprise finance:
Invoice-linked payments with embedded metadata.On-chain refunds and dispute resolution for merchant services.AI-powered smart treasury agents for automated liquidity management and real-time portfolio optimization.
These capabilities allow businesses to manage global payments, receivables, and liquidity in a unified, programmable environment.
ARC Roadmap
Arc’s development roadmap is structured to deliver core functionality quickly while progressively enhancing capabilities.
Fall 2025 — Public Testnet
The first public network will feature:
Stable USDC-based transaction fees.Deterministic sub-second finality.The initial institutional FX engine.Integration with Circle’s Mint, CCTP, and Gateway services.
Mainnet Beta
Following the testnet phase, Arc will launch its mainnet with:
Ecosystem tooling for developers.Onboarding of institutional partners.Expanded payment and tokenization capabilities.
Future Upgrades
Planned enhancements include:
Advanced privacy technologies.Full MEV protection stack.Transition to a permissioned Proof-of-Stake governance model.Expansion of the validator set to include a wider range of regulated financial institutions.
Why Arc Matters
Arc’s design choices address the key limitations of many current blockchains:
Volatile fees are replaced with stable, predictable costs.Probabilistic settlement is replaced with instant, irreversible finality.Open, unvetted validator sets are replaced with trusted institutional participants.Limited privacy is replaced with configurable, compliant confidentiality.
These features make Arc especially compelling for regulated finance, where predictability, trust, and compliance are non-negotiable.
Conclusion
As the worlds of traditional finance and decentralized technology converge, the infrastructure underpinning this new era must be fast, predictable, secure, and interoperable.
Arc is built from the ground up to meet those demands. By combining stablecoin-native gas fees, ultra-fast deterministic finality, institutional-grade privacy, and seamless cross-chain integration, it positions itself as a next-generation financial settlement layer capable of powering programmable money, tokenized capital markets, and real-time global payments.
If the 20th century was defined by national payment networks, the 21st century will be defined by global, open, programmable financial networks. Arc’s vision — and its architecture — put it firmly in the race to be the backbone of that future.
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Arc Blockchain by Circle — An Overview was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.