BlackRock and Goldman Sachs participate! Circle launches Arc Testnet, with 100 traditional giants rushing in.

The world's second largest stablecoin issuer, Circle, has launched the Arc public Testnet, which is its open Layer 1 Blockchain network aimed at bringing global financial infrastructure on-chain. Circle refers to this release as the “Internet Economy Operating System,” with participation from over 100 large companies in banking, Capital Market, and fintech, including BlackRock, Goldman Sachs, Visa, Mastercard, State Street, and others.

Circle Arc Testnet Launch, Hundreds of Traditional Institutions Compete for Presence

(Source: Circle)

Circle CEO Jeremy Allaire stated, "With the launch of the Arc public Testnet, we've seen remarkable early momentum, with leading companies, protocols, and projects beginning to build and test. He added, “These companies collectively reach billions of users, transferring, trading, and custodying hundreds of trillions of dollars in assets and payments.” This scale of hundreds of trillions of dollars demonstrates that Circle Arc is not an experimental project, but rather an enterprise-grade infrastructure designed to support the global financial system.

The launch of the Testnet has attracted participation from major institutions such as Apollo, BNY Mellon, Intercontinental Exchange, and Deutsche Bank. Apollo is one of the largest alternative asset management companies in the world, managing assets over $600 billion. BNY Mellon is the oldest bank in the United States and the largest custodian bank and asset servicing company globally. The Intercontinental Exchange is the parent company of the New York Stock Exchange, while Deutsche Bank is one of the largest investment banks in Europe. The participation of these institutions indicates that the attitude of the traditional financial sector towards Blockchain infrastructure has shifted from a wait-and-see approach to active participation.

The participation of global payment companies Mastercard, Visa, FIS, Paysafe, and Nuvei is particularly important. Mastercard and Visa together process over 60% of the world's credit card transactions, and their involvement suggests that Circle Arc has the potential to integrate blockchain technology into mainstream payment systems. FIS is the largest financial technology services company globally, serving over 20,000 financial institutions. The participation of these payment giants provides Arc with a crucial bridge connecting traditional financial systems to the blockchain world.

Types of Institutions Participating in the Circle Arc Testnet:

Asset Management Companies: BlackRock (managing over $10 trillion), Apollo ($600 billion), State Street Bank ($4 trillion)

Investment Banks: Goldman Sachs, Deutsche Bank

Custody and Settlement: Bank of New York Mellon, Intercontinental Exchange

Payment Network: Visa, MasterCard, FIS, Paysafe, Nuvei

Crypto Native Platforms: MetaMask, Fireblocks, Chainlink, Alchemy, LayerZero

Arc Technical Features and Application Scenarios

Circle Arc aims to provide predictable dollar costs, sub-second finality, and optional privacy controls. Predictable dollar costs are one of the key barriers for businesses adopting Blockchain, as traditional blockchains like Ethereum experience significant fluctuations in gas fees, which can soar to hundreds of dollars during network congestion, making it unacceptable for businesses that require stable cost budgeting. Circle Arc uses USDC as its native gas coin, ensuring that fees are priced in dollars and are predictable.

Sub-second finality means extremely fast transaction confirmation speeds, which are crucial for financial applications. Traditional blockchains like Bitcoin require about 10 minutes to confirm a transaction, while Ethereum takes about 12 seconds. Payment and trading scenarios often demand instant settlement, and Arc's sub-second finality enables it to support high-frequency trading, instant payments, and other delay-sensitive applications. Optional privacy controls address enterprises' needs for transaction privacy, allowing organizations to protect sensitive business information when necessary.

The integration of Arc and Circle's USDC stablecoin and payment stack is one of its biggest competitive advantages. USDC is the second largest stablecoin globally, with a circulation of over $50 billion, widely used in cryptocurrency trading, DeFi applications, and cross-border payments. By integrating USDC as a native asset into Arc, Circle creates a seamless ecosystem where users can directly use USDC to pay gas fees, conduct transactions, and build applications without the need to convert between multiple tokens.

Arc aims to support a wide range of financial applications, from lending and Capital Market to global payments and foreign exchange. In the lending field, Arc can support enterprises in issuing bonds, managing credit lines, and executing mortgages. In the Capital Market, it can support tokenized trading of stocks, bonds, and derivatives. In the global payments sector, Arc's sub-second finality and predictable costs make it an ideal platform for cross-border remittances and B2B payments. In the foreign exchange field, Arc can support real-time exchanges between multiple stablecoins, reducing foreign exchange trading costs.

Stablecoin Infrastructure and Ecosystem Integration

Another important feature of Arc is its role in the stablecoin infrastructure. The network supports fiat-pegged tokens, tokenized funds, and foreign exchange liquidity. Issuers from seven countries, including JPYC (Japan), BRLA (Brazil), MXNB (Mexico), and PHPC (Philippines), have joined the testnet. This support for multi-coin stablecoins opens up global markets for Arc, enabling it to serve regional markets that require local currency settlement.

JPYC is a stablecoin pegged to the Japanese yen, holding a significant market share in Japan. BRLA serves the Brazilian market, which is the largest economy in Latin America. MXNB targets the Mexican market, one of the largest remittance destinations in the United States. PHPC serves the Philippines, which is one of the countries with the highest remittance inflows globally. The addition of these local stablecoins means that Circle Arc is not only a global network but also an infrastructure capable of penetrating local markets.

Circle stated that Arc's dedicated architecture connects local markets across major continents from Africa to the Americas and Asia, providing enterprise-grade infrastructure for traditional financial institutions and Web3 native projects. This cross-continental connectivity is especially important for global financial institutions that need to operate across multiple jurisdictions and comply with varying regulatory requirements. Arc's architectural design takes this complexity into account, offering flexible compliance tools and optional privacy controls.

The Arc ecosystem is not limited to finance, but also integrates with leading developers and infrastructure providers such as MetaMask, Fireblocks, Chainlink, Alchemy, and LayerZero, as well as cross-chain bridges like Wormhole and StarGate. MetaMask is the world's most popular crypto wallet, Fireblocks provides enterprise-grade digital asset custody and transfer services, Chainlink is a leading decentralized oracle network, Alchemy offers blockchain development tools, and LayerZero enables cross-chain interoperability. These integrations provide developers with a complete toolchain, lowering the barriers to building applications on Arc.

The integration of artificial intelligence is also on the roadmap, with Anthropic's Claude Agent SDK enhancing the developer experience through AI tools. This type of AI integration may enable developers to use natural language to describe the applications they want to build, with AI automatically generating smart contract code, significantly lowering the technical barriers to blockchain development.

Global Market Connectivity and Community Governance Vision

Allaire stated that Circle Arc “aims to connect every local market to the global economy” and added that it provides opportunities for “building enterprise-grade network infrastructure” for all types of companies. This global connectivity capability is one of Arc's most ambitious goals. The current financial system is highly fragmented, with different countries and regions using different payment networks, settlement systems, and regulatory frameworks. Cross-border transactions often require multiple intermediaries, taking days and incurring high costs.

Circle stated that the long-term goal is to transform Arc into a community-managed network, expanding validator participation and establishing transparent governance. This decentralized governance model is one of the core principles of Blockchain, but it poses challenges for enterprise-level infrastructure. Circle needs to gradually transfer control to the community while maintaining network stability and performance. This transition typically takes years and involves complex technology and governance design.

Circle announced plans to launch Arc in August, at which time the company stated that the network would use USDC as its native Gas coin. Last week, Allaire also announced that Circle is building a private stablecoin on Arc. A private stablecoin refers to a stablecoin that can only be used by specific institutions or user groups, and this design meets the needs of enterprises for privacy and compliance, enabling them to conduct internal settlements or restricted transactions on the blockchain.