Circle Shakes Up Crypto: Arc Blockchain Launch Sparks Centralization Debate

Circle—the powerhouse behind USDC—just dropped a bombshell: its own Layer 1 blockchain, Arc, is coming. Cue the predictable mix of hype and side-eye from the crypto crowd.

Centralization fears flare

With Circle calling the shots on Arc’s governance, decentralization maximalists are already sharpening their pitchforks. 'Company-controlled chain' whispers hit Twitter faster than a memecoin rug pull.

Stablecoin giant plays infrastructure

The move signals Circle’s野心 beyond stablecoins—now it wants a piece of the base-layer action. Smart play or overreach? Wall Street analysts are too busy calculating their own token launches to care.

Closing thought: Nothing says 'trustless' like a corporate blockchain rollout timed perfectly with the next bull run. How very… convenient.

Circle’s Arc

Arc will serve as a high-performance base for stablecoin payments, foreign exchange (FX), and capital markets applications.

The network will be compatible with ethereum Virtual Machine (EVM) and will use USDC as its default gas token. It also introduces a built-in stablecoin FX engine, sub-second settlement finality, and optional privacy features.

According to the blockchain network’s litepaper, Arc’s performance targets include 3,000 transactions per second (TPS) with under 350 milliseconds finality using 20 validators. Notably, the network could reach 10,000 TPS and under 100 milliseconds of finality with four validators.

Arc will also integrate confidential transfers, enabling hidden amounts with visible addresses, alongside selective disclosure via a “view key.”

Meanwhile, its MEV mitigation roadmap includes encrypted mempools, batch processing, and multi-proposer setups.

Arc will support Circle’s USYC, an interest-bearing stablecoin backed by short-term US Treasury securities. It will also offer fast bridging via Circle’s CCTP and Gateway, a built-in currency trading system for approved institutions, and AI-powered treasury management tools.

Beyond stablecoins, Arc is designed to host regulated real-world assets (RWAs) such as tokenized equities, bonds, private credit, and institutional-grade funds.

Circle plans to partner with licensed asset issuers, custodians, and fund administrators to ensure these assets are legally compliant, fully collateralized, and integrated with traditional financial obligations.

Community pushback

Despite its ambitious design, Arc has faced pushback from crypto community members.

Columbia Business School adjunct professor Omid Malekan argued that launching another Layer 1 is unnecessary, especially for stablecoins, which may struggle without diverse assets or strong DeFi ecosystems.

Adam Cochran, partner at venture capital firm Cinneamhain Ventures, also criticized the characterization of Arc as a Layer 1 blockchain.

According to him, the network is more accurately a consortium chain operated by a set of pre-approved, private validators. These validators, he noted, have the authority to reverse transactions through “dispute protocols.”

Moreover, he also argued that using USDC as the root token removes the economic incentives needed for validators to act independently, making a truly decentralized Layer 1 model unfeasible. As a result, he said, the design necessitates a closed, consortium-based structure.

Cochran concluded:

“Blockchains exist because exploitative middlemen, like banks and transfer agents, take undue fees and apply undue censorship. This industry was built to fix that in peer-to-peer systems, not by just building new banks.”