Circle Announces Public Testnet for Arc, Finance-Focused L1 Blockchain

Circle Internet Group, the issuer of USDC, has launched a public testnet for Arc, its new Layer 1 blockchain advertised as an “economic operating system for the internet.” Arc's stated goal is to integrate stablecoins into the global economy.

What’s the Scoop?

• New Financial Backbone: Circle's Arc is a purpose-built blockchain for real-world financial infrastructure. It offers stablecoin-denominated fees, sub-second settlement, and optional privacy features.
• Institutional Participation: Financial giants like Apollo, BNY Mellon, Intercontinental Exchange, Deutsche Bank, and Standard Chartered are participating in Arc’s early testing, meanwhile, payments leaders including Visa and Mastercard are exploring stablecoin settlement application.
• Technology and AI: Arc’s developer ecosystem includes existing crypto infrastructure providers like Alchemy, Chainlink, LayerZero, and MetaMask. AI firm Anthropic (creator of Claude) is working with Circle to enhance Arc’s developer experience through AI-powered agent tools that automate smart contract testing and deployment.
• FX Layer: Stablecoin issuers are experimenting with Arc’s built-in foreign exchange swap infrastructure. The testnet includes participation from regional stablecoin issuers across Australia, Brazil, Canada, Japan, South Korea, Mexico, and the Philippines.
• Long-Term Roadmap: While Circle is stewarding initial development and operation, in a blog post, the company states that Arc will move become increasingly decentralized over time.

Bankless Take:

Arc appears to be Circle's response to the Tether-backed Plasma and Stable payments-focused chains. While Circle had previously been a chain-agnostic stablecoin issuer, distributing USDC wherever it made financial sense, the firm now stands in direct competition against existing blockchain ecosystems, like Ethereum.