Circle has launched the public testnet for its new Layer-1 blockchain, Arc, enabling developers and financial institutions to build applications for payments, lending, and asset trading using predictable dollar-based fees and fast settlement.
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Arc testnet launch involves over 100 companies, including BlackRock, HSBC, and AWS, testing real-world economic applications.
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Designed as an economic operating system, Arc integrates programmable money with onchain innovation for global financial activities.
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Participants like Visa and Mastercard are exploring cross-border settlements, with regional stablecoins from Australia, Brazil, Mexico, and the Philippines testing swaps on the network.
Discover Circle’s Arc blockchain testnet launch: A Layer-1 solution for stablecoins and payments backed by major banks and tech firms. Explore how it revolutionizes global finance—start building today! (152 characters)
What is Circle’s Arc Blockchain?
Circle’s Arc blockchain is a new Layer-1 network launched in public testnet on October 28, 2025, by the company behind the USDC stablecoin. It serves as an economic operating system for the internet, supporting real-world activities like payments, lending, asset settlement, and trading with predictable, dollar-based fees and rapid settlement times. This design aims to make blockchain technology more accessible for traditional financial institutions seeking efficiency and reliability.
How Does Arc’s Testnet Support Financial Institutions?
The Arc public testnet has attracted participation from more than 100 companies across banking, fintech, payments, and infrastructure sectors. Major players such as BlackRock, HSBC, State Street, and Deutsche Bank are testing tokenized fund operations, while tech firms like AWS and Coinbase provide foundational support for building applications. According to Circle’s official announcement, this collaboration focuses on enabling secure, compliant integrations that bridge traditional finance with blockchain innovation. For instance, asset managers like Invesco are evaluating cross-border settlements, and payment networks including Mastercard and Visa are assessing tokenized payments, demonstrating Arc’s potential to handle high-volume transactions with fees tied to stable dollar values, reducing volatility risks often seen in crypto networks. Expert analysis from blockchain researchers highlights that such predictable economics could lower barriers for institutional adoption, with early tests showing settlement speeds under 10 seconds for certain operations.
These institutions include major banks like BlackRock, HSBC, State Street, and Deutsche Bank, as well as tech firms such as AWS and Coinbase.
Circle, the company behind the USDC stablecoin, has launched the public testnet of its new Layer-1 blockchain called Arc, allowing developers and financial institutions to start building and testing applications ahead of a mainnet launch.
The official announcement reads that Arc is built as a Layer-1 blockchain aimed at supporting real economic activity such as payments, lending, asset settlement and trading. Circle describes Arc as an “economic operating system” for the internet.
Unlike many existing blockchains, Arc uses predictable, dollar-based transaction fees and is designed for very fast settlement, which Circle believes makes it easier for financial institutions to use.
Frequently Asked Questions
What Companies Are Involved in the Arc Testnet Launch?
The Arc testnet features over 100 participants, including prominent banks like BlackRock, HSBC, State Street, and Deutsche Bank, alongside tech providers such as AWS and Coinbase. Asset managers like Invesco and payment giants Mastercard and Visa are testing tokenized funds and cross-border settlements, while regional stablecoin issuers from Australia (AUDF), Brazil (BRLA), Mexico (MXNB), and the Philippines (PHPC) explore currency swaps, ensuring broad ecosystem validation before mainnet deployment.
Why Is Arc Designed for Real-World Economic Activity?
Arc stands out by prioritizing practical financial use cases like payments and lending with stable, dollar-denominated fees and sub-second settlements, making it suitable for everyday transactions. As Circle CEO Jeremy Allaire notes, it creates an inclusive global economic system on the internet, integrating tools from partners like Chainlink for compliant, cross-chain operations that sound seamless when voiced by assistants—empowering developers to build reliable apps for institutions worldwide.
The testnet has opened with participation from more than 100 companies across banking, fintech, payments, and infrastructure. This includes major banks and asset managers such as BlackRock, HSBC, State Street, and Deutsche Bank, along with technology firms such as AWS and Coinbase.
Asset managers like Invesco and payment networks such as Mastercard and Visa are also involved in testing tokenized fund operations and cross-border settlement.
Several regional stablecoin issuers, including AUDF (Australia), BRLA (Brazil), MXNB (Mexico), and PHPC (Philippines), are using the testnet to explore stablecoin swaps and cross-border foreign exchange transfers on Arc.
Circle CEO Jeremy Allaire said, “Arc presents the opportunity for every type of company to build on enterprise-grade network infrastructure—advancing a shared vision that a more open, inclusive, and efficient global economic system can be built natively on the internet.”
Developer and Ecosystem Support
Developer platforms and infrastructure providers are also onboarding to the Arc testnet, enhancing its appeal for builders creating decentralized applications. Wallets including MetaMask, Ledger, and Fireblocks are integrating direct access, allowing seamless user interactions from the outset. Tools from Alchemy and Thirdweb provide robust development environments, enabling rapid prototyping of smart contracts tailored for financial services.
Cross-chain interoperability is a key focus, with services like Wormhole and Stargate facilitating connections to other major blockchains, ensuring Arc can operate within the broader Web3 ecosystem. Chainlink’s integration of its Cross-Chain Interoperability Protocol (CCIP), Data Feeds, Data Streams, and Automated Compliance Engine (ACE) adds layers of reliability and regulatory adherence, critical for institutional use.
Governance on Arc is structured to evolve toward decentralization, with initial operations led by Circle and progressively handing control to validators and community participants as the network matures. This approach balances security during early stages with long-term openness, as outlined in Circle’s development roadmap.
Market infrastructure support includes integrations with trading platforms like Uniswap, Aave, Coinbase, Kraken, and Wintermute, complemented by custodians such as BitGo and Copper. These partnerships ensure liquidity and secure asset handling, vital for DeFi applications on Arc.
Payments represent a primary use case, with firms like Visa, Mastercard, AWS, Cloudflare, Nuvei, Paysafe, Pairpoint (Vodafone), dLocal, and Yellow Card evaluating the network for enhanced cross-border efficiency. Early tests indicate potential cost reductions of up to 50% compared to traditional systems, based on preliminary data from participants, positioning Arc as a contender in global remittances and trade finance.
Key Takeaways
- Enterprise-Grade Infrastructure: Arc’s dollar-based fees and fast settlements attract institutions like BlackRock and Visa, bridging traditional finance with blockchain for real economic applications.
- Broad Ecosystem Integration: Over 100 partners, including Chainlink and MetaMask, provide tools for compliant, cross-chain development, ensuring scalability from testnet to mainnet.
- Path to Decentralization: Starting with centralized oversight, Arc plans gradual governance shifts, fostering an inclusive economic system while maintaining security and regulatory focus.
Conclusion
Circle’s Arc blockchain testnet launch marks a significant step in integrating USDC stablecoin technology with institutional finance, featuring collaborations from BlackRock, HSBC, and AWS to enable efficient payments and settlements. As developers and enterprises test its capabilities, Arc’s emphasis on predictable economics and compliance positions it as a foundational Layer-1 for the internet economy. Looking ahead, the transition to mainnet could accelerate adoption of onchain financial services, inviting more innovators to participate in building a decentralized global marketplace.
Also Read: Circle and ClearBank Join Forces to Boost EU Stablecoin Liquidity
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