Circle plans native token for Arc blockchain as Q3 profit surges
News Summary
Stablecoin issuer Circle is planning a native token for its enterprise-focused Ethereum Virtual Machine (EVM) network, the Arc layer-1 blockchain testnet. The Arc testnet launched in October 2025 with participation from Goldman Sachs, BlackRock, Visa, and over 100 other companies. Circle initially intended to center gas fees on the Arc network around USDC and other stablecoins but is now exploring a native token to foster network participation, drive adoption, align stakeholder interests, and support Arc's long-term growth and decentralized governance. The company reported strong financial results for Q3 2025, with revenue reaching $740 million, a 66% year-over-year increase, and net income surging 202% to $214 million. However, costs also rose significantly, with distribution and transaction costs up 74% to $448 million, and operating costs increasing 70% to $211 million, attributed to a 14% workforce expansion and higher compensation. EBITDA for the quarter increased 78% year-over-year to $166 million. The launch of the Arc network highlights growing institutional involvement in crypto and the shift towards application-specific blockchains (appchains). While critics argue appchains can fragment liquidity, be prone to centralization, and lack community support, proponents believe they address the speed, scalability, and high fee issues of general-purpose blockchains.
Background
Circle is a prominent global stablecoin issuer, best known for its USD-pegged stablecoin, USDC, which plays a crucial role in digital asset liquidity and settlement. The Arc blockchain is a Layer-1 Ethereum Virtual Machine (EVM) network developed by Circle, specifically designed to offer tailored blockchain solutions for enterprise applications. This initiative reflects a growing trend within the blockchain industry to develop application-specific blockchains (appchains) to address limitations in speed, scalability, and cost often associated with general-purpose blockchains. In recent years, traditional financial giants like Goldman Sachs, BlackRock, and Visa have increasingly recognized the potential of blockchain technology, actively exploring and participating in various blockchain projects, thereby driving the institutionalization of the cryptocurrency space.
In-Depth AI Insights
Why is Circle pivoting to a native token for Arc, rather than solely using USDC for gas fees? What strategic considerations underpin this shift? Circle's shift from initially planning to use USDC for gas fees to exploring a native token is a profound strategic adjustment, reflecting a trade-off between decentralization and value capture: - Decentralization and Governance Imperatives: While USDC is a centrally issued stablecoin, Arc's stated long-term goal is to pivot to a decentralized governance model with