Early participants from capital markets and payments are probing whether stablecoin-denominated fees, sub-second finality and privacy controls can lower costs and complexity for cross-border money movement and tokenised assets.
Circle has launched a public testnet for Arc, a new Layer-1 blockchain it bills as an “economic operating system” for on-chain finance, with more than 100 banks, asset managers, exchanges and fintech firms taking part.
The NYSE-listed stablecoin issuer said Arc, launched for testing on October 28, is designed for sub-second finality, opt-in privacy and predictable dollar-based fees, and is now available for developers and enterprises to build and test.
Arc’s pitch is to move core financial workflows such as payments, FX, lending and settlement onto infrastructure that integrates directly with Circle’s platform and stablecoins. Early participants span capital markets and payments heavyweights, including BlackRock, BNY, State Street, Goldman Sachs, Visa, Mastercard, AWS and Coinbase, signalling institutional interest in programmable settlement and stablecoin-denominated transactions.
Jeremy Allaire, Circle’s CEO, said the testnet shows “remarkable early momentum” and is “purpose-built to connect every local market to the global economy.” The company expects governance to decentralise over time through broader validator participation and community input.
Several institutions framed their involvement as exploratory. BlackRock’s Robert Mitchnick said testing Arc could show how “stablecoin-denominated settlement and on-chain FX capabilities might enable more efficient capital markets.”
HSBC’s Manish Kohli said the bank wants to see whether Arc can make cross-border payments “more efficient and connected.” Mastercard’s Raj Dhamodharan called the launch “a meaningful step toward advancing programmable money,” while Visa’s Cuy Sheffield highlighted deterministic finality and “programmable interoperability.”
Circle, which listed this year under the ticker CRCL, has positioned Arc as a network with predictable, dollar-based fees rather than volatile native-token gas, a design aimed at enterprise adoption. The move comes as policymakers scrutinise stablecoins and tokenised market plumbing, with the Bank for International Settlements arguing that tokenised platforms could underpin the next-generation financial system and European Central Bank officials urging strict safeguards for foreign stablecoins active in Europe.
Arc’s promised features include deterministic, sub-second finality, privacy controls, and native support for stablecoin gas and FX liquidity. On the market side, participants include DeFi venues such as Uniswap and Curve, as well as custodians like BitGo and Zodia, suggesting Circle wants to bridge regulated finance with existing crypto liquidity.
Arc is in testnet and Circle notes that features may change and that the network has not been reviewed by New York’s Department of Financial Services. The company says governance will evolve to a distributed model operated by a broad set of financial and technology participants. For investors, Arc also lands ahead of Circle’s next earnings update, with the firm under close watch following its post-IPO rally.
