Circle Unveils Whitepaper for Stablecoin-Specific Layer 1 'Arc'... Aiming for 'Economic OS of the Internet'

On May 11, 2026, USDC issuer Circle released the whitepaper for 'Arc,' a Layer 1 blockchain that positions itself as the 'Economic OS of the Internet.' This suggests that Circle is evolving beyond a simple stablecoin issuer into a network operator that directly manages the infrastructure where assets circulate.

Scheduled for a mainnet launch in the summer of 2026, Arc aims to facilitate institutional adoption by solving the chronic issues of volatility and finality in public blockchains. Through this, Circle intends to lay the foundation for the global financial system to operate seamlessly on-chain.

Arc is not just a general-purpose blockchain but provides a financial environment specialized for USDC. By using the term 'Economic OS,' Circle revealed its ambition to build a seamless, institutional-grade platform for global payments and financial transactions. This is interpreted as an attempt to integrate existing fragmented financial infrastructure.

Arc is a Layer 1 blockchain precisely designed for stablecoin-native finance, and it will serve as the economic operating system of the internet.

Technically, Arc implements 'Deterministic Finality' by introducing the 'Malachite' consensus engine. This eliminates the possibility of transactions being reversed during a company's order processing, helping to immediately initiate subsequent business processes. Such high-performance consensus design is an essential element for financial institutions where real-time settlement is critical.

Technical Foundation: Malachite Engine and USDC Gas Fees

One of Arch's most significant features is its 'stablecoin-native' model, where gas fees are paid in USDC rather than a native token. In existing blockchains, predicting transaction costs was difficult due to the price volatility of native tokens used for gas fees, but Arch has fixed this to USDC, drastically reducing the accounting burden for enterprises.

• Maintains transparency and confidentiality through an opt-in privacy mechanism for regulated institutions.
• Protects the network from future computing threats by applying post-quantum security technology.
• Encourages easy entry for the existing developer ecosystem by maintaining compatibility with the Ethereum Virtual Machine (EVM).
• Strengthens network reliability and security by introducing an institutional-grade validator system.

According to the whitepaper, Arch's native utility asset, the ARC token, has an initial total supply of 10 billion. Circle recently raised $222 million through a private pre-sale involving SBI Holdings and a16z crypto. This resulted from selling 740 million tokens, approximately 7.4% of the total supply, at $0.30 each, valuing Arch at $3 billion.

In particular, Japan's SBI Holdings announced its participation in this pre-sale through an official announcement on May 12, 2026, emphasizing its strategic cooperation with Circle. The participation of such large-scale institutional investors reflects the market's high level of trust in Arch's goal of building an institution-centric ecosystem.

Market Position and Future Roadmap

As of 2026, Ethereum maintains its lead in terms of liquidity but suffers from Layer 2 fragmentation issues, while Solana captures market share by processing high transaction volumes. Arch presents a 'middle ground' optimized for stablecoin payments between them, adopting a strategy that focuses on the settlement efficiency of real-world assets rather than general DeFi.

Since its launch in October 2025, Arch's testnet has proven its stability by processing a total of 244.1 million transactions as of May 5, 2026. Circle plans to integrate the Cross-Chain Transfer Protocol (CCTP) with the mainnet launch in the summer of 2026 to easily bring USDC liquidity scattered across other chains into Arch.

Circle's move is interpreted as a strategic positioning to secure network fees and ecosystem control, going beyond stablecoin issuance revenue. As the mainnet becomes fully operational in the summer of 2026, the industry is closely watching whether Ark can play a key role as a bridge connecting traditional financial systems and the blockchain.