Circle has unveiled a new project called Arc — an open EVM-compatible Layer-1 blockchain designed for stablecoin finance. USDC will be used as gas.
Discussion of Arc and Its Goals
On August 12, Circle announced **Arc** — a blockchain aimed at creating stable and reliable money systems for payments, FX, and capital markets, using USDC as the gas token. Costs will be settled in dollars for predictability, and transaction finality aims for sub-second speeds using a high-performance consensus termed **Malachite**.
Implications for Ethereum
If stablecoins migrate to their own issuer-run Layer-1s like Arc, Ethereum may experience a loss of activity and fee revenue. However, Arc is being developed with Ethereum compatibility in mind, potentially returning liquidity to the platform. Ethereum's current performance, nearing a four-year high, underscores the significance of this situation.
Features of Arc
* **USDC as gas** → predictable, dollar-denominated fees. * **Built-in stablecoin FX** → an engine for USDx/EURx pairs. * **Deterministic sub-second finality** → fast operations suitable for enterprises. * **Opt-in privacy** → selective privacy for compliance needs. Arc aims to leverage USDC's wide use to foster a platform for financial activities, including trading and commerce.
Arc offers an innovative approach to utilizing stablecoins as a platform for financial operations. Monitoring the platform's development and testing will be important moving forward.
