After unveiling its Arc blockchain in August, Circle has just opened the testnet for this new Layer 1 blockchain dedicated to stablecoins to the public. Which players are involved in this project?
Circle Opens the Public Testnet for Its Arc Layer 1
On Tuesday, Circle opened the public testnet for its Arc blockchain, announcing the participation of well-known names from traditional finance, such as BlackRock, Deutsche Bank, HSBC, and Goldman Sachs.
Unveiled last August, this Layer 1 network will prioritize the USDC stablecoin and is expected to enable Circle to capture a share of the institutional market, which is showing increasing interest in tokenization:
We believe we are at a turning point where scalable, globally distributed blockchain networks are becoming mainstream, thereby contributing to a massive migration of economic activity to the Internet. In this context, we view Arc as the Internet’s economic operating system, driving a platform transformation as profound as the launch of the Internet itself and the subsequent revolutions in social media, mobile, cloud, and AI.
Furthermore, Arc positions itself as “a foundation for issuers of fiat-backed stablecoins, as well as tokenized equities, debt securities, money market funds, etc.” Consequently, the testnet is opening up to various stablecoins backed by the currencies of other countries—such as Australia, Brazil, Canada, Mexico, and the Philippines—through the following assets:
- Forte AUD’s AUDF;
- Avenia’s BRLA;
- JPYC Inc.’s JPYC;
- BDACS’s KRW1;
- Juno’s MXNB;
- Coins.PH’s PHPC;
- and Stablecorp’s QCAD.
As for the various infrastructures and applications, we find the usual names already present on many other networks, such as Curve, Aerodrome, Euler Finance, Aave, Morpho, and Uniswap. Thus, it remains to be seen how the network will develop in the future, in an already highly competitive space where everyone offers the same services without any real differentiators.
For now, only USDC is used to pay gas fees, but in the future, other stablecoins may also be supported.
To date, there has been no mention of any governance token, which could, for example, be distributed via an airdrop. However, while such a token seems unlikely, Circle explains that Arc will evolve into a “distributed, community-driven system.” Thus, governance could be distributed among various financial institutions, technology platforms, protocol developers, and other infrastructure providers:
This progression will include expanding validator participation, establishing transparent and verifiable governance frameworks, and involving the community in the network’s evolution. Arc’s goal is to become the de facto neutral and shared layer of the Internet’s economic infrastructure: open, cryptographically sound, and collectively managed.
Meanwhile, the USDC currently has a market capitalization of $76.19 billion, representing 24.45% of the total stablecoin market capitalization.
