Circle debuts public testnet of its payment-focused Arc chain – Details 

Key Takeaways

What’s next for Arc as it rolls out public testnet?

If the test is successful, the payment-focused chain could soon hit the public mainnet for everyone. 

Why is Arc’s progress important?

It signals incoming shifts across the stablecoin payment ecosystem, and whether Ethereum will hold its ground remains to be seen. 

Circle, the issuer of the USDC stablecoin, is close to launching its Arc chain – A global payment-focused L1 powered by digital dollars. In a statement on 28 October, the firm said that it had begun public testing for the chain alongside key design partners. The partners include top banks, insurers, and asset managers like BlackRock, HSBC, and Absa, among others. 

According to Circle CEO Jeremy Allaire, the partners have billions of users and handle trillions of dollars in assets across the globe. He claimed that Arc can seamlessly allow local markets and builders to connect to the global economy.

Allaire called it the “economic OS of the internet,” and added, 

“This geographic diversity highlights a defining strength of Arc: its purpose-built to connect every local market to the global economy.”

Stablecoin payments heat up

Beyond global and agentic payments, Arc also aims to support on-chain FX (foreign exchange) and capital markets (tokenization). 

In fact, BlackRock’s Global Head of Digital Assets, Robert Mitchnick, underscored FX and tokenization as key interests for them in the project. He said, 

“Exploring Arc will provide insight into how stablecoin-denominated settlement and onchain FX capabilities might enable more efficient capital markets and unlock additional utility for onchain assets.”

Arc is not the only purpose-built project seeking to rewrite payment and capital markets via on-chain rails though. 

Google, Stripe, and Tether have similar plans. In fact, Tether-backed Plasma [XPL] is already live and handles about $6 billion of the stablecoin supply. It’s now the fifth-largest chain for digital dollars. 

Google’s GUCL and Stripe’s Tempo are expected to launch in the near future. Collectively, the new chains could challenge Ethereum’s market share in stablecoin settlement, according to some analysts. 

Out of the current $305 billion in total stablecoin supply, Ethereum controls $162 billion or 53%. Tron [TRX] handles about a quarter of the overall market, while the rest is shared among other chains. 

However, in terms of stablecoin transfers, Ethereum’s volumes have been making record figures every month. In fact, for the first time, the stablecoin volume crossed the $2 trillion milestone on Ethereum this October. 

Even so, it remains to be seen whether Arc, Plasma, Tempo, or Google’s payment chains will grab Ethereum’s market share.