Circle, the company behind the dollar-backed stablecoin USDC, has officially taken a major step into blockchain infrastructure with the announcement of its network.
Named Arc, this new layer 1 blockchain is designed specifically for stablecoin finance and will roll out with early support from Fireblocks, a custody and tokenisation platform that already serves more than 2,400 banks, fintechs, and asset managers.
The move marks a significant evolution for Circle, which until now has primarily been recognised as an issuer of USDC. With Arc, Circle is looking to expand its reach beyond issuing a stablecoin and into the wider financial infrastructure that supports it.
Arc and Fireblocks: A Blockchain Built for Institutions from Day One
Arc represents Circle’s ambition to build a dedicated blockchain optimised for stablecoin transactions, payments, and related financial applications.
The launch has been carefully planned, with a public testnet scheduled for later this year, followed by a full mainnet rollout before year-end.
By partnering with Fireblocks, Circle has secured immediate access for banks and institutions, offering them custody and compliance solutions from day one.
This early partnership has drawn comparisons with other blockchains. For instance, Solana launched in 2020 but only gained Fireblocks integration a year later, once its ecosystem had grown.
Circle’s decision to prioritise institutional readiness means Arc will debut with the kind of support many competitors had to wait for.
The benefit is clear: banks and asset managers can transact on Arc from its first day of operation, reducing adoption friction and creating immediate use cases.
The timing is also significant. The US stablecoin market has been receiving increased regulatory attention, with the GENIUS Act signed in July 2025, providing a clearer legal framework.
This backdrop offers Circle the chance to strengthen its institutional presence while simultaneously positioning Arc as a blockchain tailored for compliance and scalability in financial markets.
Beyond Fireblocks integration, Circle has been building momentum with other initiatives. Its recent IPO raised $1.05 billion, making it the first public offering from a stablecoin issuer. Shares opened at $69, peaked at nearly $299, and settled around $145.
At the same time, USDC circulation has surged, growing 90% year-on-year and reaching $65 billion in early August.
These developments indicate Circle’s determination to scale beyond being a stablecoin provider to becoming a broader payments and financial infrastructure company.
Competition remains fierce. While Circle has captured roughly a quarter of the fiat-backed stablecoin market, Tether still dominates with around 60%. Tether reported a profit of $4.9 billion in Q2 2025, primarily from income on its vast US Treasury holdings.
This rivalry underscores the strategic importance of Arc: Circle is seeking to add another layer of value that may help it close the gap with Tether by offering not only a stablecoin but also the blockchain infrastructure designed to support it.
Malachite Acquisition: Strengthening Arc and Testing Investor Confidence
In parallel with Arc’s unveiling, Circle has made another bold move by acquiring Malachite, a high-performance consensus engine developed by Informal Systems.
Malachite is based on a Byzantine Fault Tolerant framework and draws on Tendermint technology to deliver speed, security, and scalability.
By bringing Malachite under its control, Circle is laying the foundation for Arc to become a blockchain optimised for financial services, with an emphasis on performance and verifiability.
The acquisition includes both the intellectual property and personnel from Informal Systems, with nine team members joining Circle to accelerate development.
Importantly, Malachite will remain open-source under the Apache 2.0 licence, allowing developers outside of Circle to continue using and extending the technology.
This approach strengthens Circle’s credibility as it builds Arc, positioning the chain not just as a closed system but as an infrastructure layer with open development possibilities.
Market reaction, however, was mixed. Circle’s shares, trading under the ticker CRCL, slipped 5.23% following the announcement, closing at $141.46. The decline represented a $7.80 drop from the prior close, with trading volume notably below the daily average.
Analysts pointed to investor caution in response to the company’s ambitious expansion into blockchain infrastructure, particularly as Arc has yet to launch. Still, after-hours trading saw a modest rebound, with shares ticking up to $141.87.
Despite the short-term dip, analysts maintain a generally positive outlook on Circle’s stock, with a one-year price target of $182.46. The company currently commands a market capitalisation of $35.2 billion.
While the near-term reaction suggests investor uncertainty about the acquisition’s immediate benefits, the longer-term view recognises the potential of Arc to redefine Circle’s role in the digital asset ecosystem.
By acquiring Malachite, Circle is signalling that it wants Arc to be more than a symbolic entry into blockchain. Instead, it is attempting to build a scalable and institutionally ready platform that can handle the demands of stablecoin finance at a global scale.
This is particularly relevant as stablecoins are projected to become a trillion-dollar market and an integral part of cross-border payments.
The acquisition also aligns Circle with a broader trend of financial technology firms developing blockchains for specific use cases. Stripe is building Tempo with Paradigm, while Robinhood has launched a layer 2 focused on tokenisation.
In this context, Circle’s strategy with Arc and Malachite is not an isolated step but part of a wider movement by companies to build infrastructure tailored to their financial products.
Conclusion
Circle’s launch of Arc and acquisition of Malachite mark a turning point for the company as it transitions from a stablecoin issuer into a broader financial infrastructure provider.
By debuting Arc with Fireblocks integration, Circle ensures institutional adoption from day one, while the Malachite acquisition provides the technical backbone for scalability and security.
Although the stock market reacted cautiously, analysts continue to see significant long-term upside. With stablecoin competition intensifying and the market expanding rapidly, Circle’s bold moves place it at the centre of the next stage in digital finance.