Circle has officially entered the global stablecoin network competition by unveiling its dedicated L1 blockchain 'Arc' for USDC. This launch is differentiated by utilizing USDC as a gas token instead of volatile cryptocurrencies, providing predictable fees and an institution-friendly environment.
Arc has been designed with a USDC native gas structure, allowing all transaction fees to be paid in USDC. This enables enterprises and institutions to minimize cost volatility, and it also provides optional privacy features supporting regulatory compliance and sensitive transactions. Additionally, by introducing an ERC-4337-based Paymaster function, fees can be paid with other tokens or CBDCs when necessary.
Using 'Malachite' consensus algorithm developed by Canada's Informal Systems, Arc guarantees transaction finality in less than a second and high scalability. Arc has also introduced a stabilization mechanism by improving Ethereum's EIP-1559 model to prevent fee spikes.
This Arc launch has made the competitive landscape with Tether even more distinct. While Tether expands its USDT network through external project collaborations, Circle has chosen an integrated ecosystem strategy by building its own blockchain. Tether's approach has the advantage of rapid expansion but may disperse user experience. In contrast, Circle is focusing on long-term trust building based on regulatory friendliness and stable infrastructure, even if growth is slower.
Competition with USDC-specialized network candidates like Codex and 1Money Network has also become inevitable. With Arc's release declaring Circle's independent path, the reconfiguration of relationships with existing partners is also drawing attention.
The stablecoin network war has now entered its full second round. Whether Tether's diversification approach or Circle's integrated strategy will become the global payment infrastructure standard depends on future market choices.
