Inside Arc: Circle's stablecoin-native blockchain
Circle introduced Arc, its Layer 1 blockchain, in 2025, positioning it as a network for stablecoin-native settlement.
In its Q1 2026 earnings filing on 11 May, Circle disclosed a 222-million-dollar ARC token presale at a 3 billion dollar fully diluted valuation, selling 740 million tokens at $0.30 each. a16z crypto led with 75 million dollars, with BlackRock, Apollo, Intercontinental Exchange, ARK Invest, SBI Group, Janus Henderson and Standard Chartered Ventures among roughly a dozen backers. It was the first token presale run by a publicly listed company, disclosed in an audited SEC filing.
What is Arc?
Arc is a Layer 1 blockchain designed for institutional finance. It settles in USDC, which also serves as the gas token, so transaction costs are denominated in dollars rather than a volatile native asset. It is EVM-compatible, supporting existing Solidity tooling, and includes enterprise compliance tooling, opt-in privacy, and native support for tokenized Real-World Assets.
The consensus layer runs on Malachite, a Byzantine Fault-Tolerant engine based on Tendermint that Circle acquired from Informal Systems in 2025. Malachite provides deterministic finality: once a supermajority of validators commits a block, it is final, without reorganisation risk or multiple confirmations. For payments, FX and treasury operations, this removes multi-block settlement risk.
Pricing gas in USDC addresses a constraint common to most chains. When gas is paid in a volatile token, the dollar cost of a transaction varies with the token price even when the base fee is stable. Arc denominates fees in dollars. It also connects to Circle's cross-chain stack, including CCTP and Gateway, allowing native USDC to move between Arc and other chains without wrapped assets.
Core native assets
Arc is structured around several instruments rather than a single token.
- USDC is the native asset, used for gas and settlement.
- EURC supports euro-denominated payments and FX.
- USYC provides tokenized exposure to a money market fund backed by short-duration US Treasuries.
There is also a native network token, ARC, which Circle sold in the May presale. ARC functions as the network's coordination and security asset as Arc transitions to proof-of-stake: validators produce blocks and maintain the chain, earning rewards from issuance and network fees.
The whitepaper sets an initial supply of 10 billion tokens, with 60% allocated to ecosystem growth and 25% to Circle. Several parameters governing long-term dilution are deferred to a future governance vote.
USDC is the transactional currency on Arc; ARC is the network's security asset.
How is Arc helping institutional adoption?
Arc addresses several requirements that have historically limited institutional use of public blockchains: predictable costs, regulatory compliance, privacy controls, and reliable infrastructure.
USDC-denominated fees give institutions predictable operating costs. Deterministic finality reduces counterparty risk and improves capital efficiency for payments, treasury movement, and asset transfers. The compliance-ready architecture and opt-in privacy tooling allow firms to operate within regulatory frameworks while retaining a public ledger's transparency. EVM compatibility allows integration into existing systems without rebuilding from scratch.
Institutional adoption
The public testnet has been live since October 2025, with more than 100 institutions participating, including BlackRock, Visa and HSBC. The use cases under exploration include cross-border payments, real-time treasury and liquidity management, tokenized asset issuance, and FX settlement, with the common aim of reducing settlement friction and improving capital efficiency on stablecoin rails.
The investor base includes BlackRock, Apollo Global Management, and Intercontinental Exchange, which owns the New York Stock Exchange. Their participation indicates an interest in Arc as a settlement layer for tokenized dollars, with potential extension to tokenized funds, securities, and other real-world assets over time.
Running a validator with Kiln
Arc launches with a permissioned validator set, selected on operational resilience, geographic distribution, and regulatory compliance. Circle has indicated the network may transition from Proof-of-Authority to a permissioned Proof-of-Stake as it matures, with validator access remaining controlled. Validator selection is not open; it depends on an operator's ability to meet institutional standards for uptime, security, and compliance.
Kiln operates enterprise-grade validator infrastructure across major blockchain ecosystems. The validator set and tokenomics are still being defined, so participation at this stage carries a role in how governance and network economics develop. For institutions evaluating participation in Arc, running validators through Kiln is one route to supporting the network while reducing operational complexity.
Beyond validators, Kiln is preparing to make Arc-native yield strategies accessible to institutions and distributors at launch through Railnet, so funds can be deployed on Arc.
About Kiln
Kiln is the leading staking and digital asset rewards management platform, enabling institutional customers to earn rewards on their digital assets, or to whitelabel earning functionality into their products. Kiln runs validators on all major PoS blockchains, with over $11 billion in crypto assets being programmatically staked and running over 5% of the Ethereum network on a multi-client, multi-cloud, and multi-region infrastructure. Kiln also provides a validator-agnostic suite of products for fully automated deployment of validators and reporting and commission management, enabling custodians, wallets, and exchanges to streamline staking or DeFi operations across providers. Kiln is SOC2 Type 2 certified.
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