Key Highlights
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Circle has begun testing its new blockchain, Arc, a network that supports stablecoin payments and settlements between institutions.
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More than 100 companies (including BlackRock, Visa, Mastercard, Amazon Web Services, Goldman Sachs and Deutsche Bank) are part of the pilot project.
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Arc has a currency exchange system that allows users to exchange one stablecoin for another, such as USDC, JPYC, or BRLA.
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Transactions are made through verified participants with fixed dollar fees and are confirmed in less than a second.
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Circle is operating the network during testing and plans to allow approved financial institutions to run their own validator nodes later.
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The pilot covers cross-border payments and fund transfers, with limited live testing expected in 2026 after security and compliance review.
SINGAPORE — Circle Internet Financial, the issuer of the USDC stablecoin, has launched a public testnet for its new blockchain network, Arc, bringing more than 100 companies, including BlackRock, Visa, Amazon Web Services and several global banks, to the first tests.
Arc is designed to process financial transactions using stablecoins instead of traditional bank payment methods.
The network allows direct, real-time transfers between digital currencies backed by national currencies such as the US dollar, Japanese yen or euro.
Network Focused on Institutional Payments
Arc operates as a permissioned Layer 1 blockchain, where all participants are verified before accessing the system.
It uses fixed dollar-based transaction fees and confirms payments in less than a second.
Circle said the setup is aimed at institutions that need predictable costs and regulatory compliance rather than open market speculation.
The network connects to Circle’s existing USDC infrastructure so that financial institutions can settle transactions directly in digital dollars without using the SWIFT network or correspondent banks.
Participants in the Testnet
More than 100 companies have joined the testing phase.
These include asset managers such as BlackRock and Goldman Sachs; banks such as BNY Mellon, HSBC, Deutsche Bank and Standard Chartered; and payment companies Visa and Mastercard.
Technology partners AWS and Cloudflare provide connectivity and infrastructure support.
Cryptocurrency trading platforms Coinbase, Kraken and Robinhood are testing wallet and exchange integrations.
Regional stablecoin issuers (JPYC in Japan, BRLA in Brazil, and QCAD in Canada) are also connected to test currency pairs.
Integrated Foreign Exchange System
A core component of Arc is its on-chain foreign exchange (FX) engine, which allows one stablecoin to be exchanged directly for another.
This mechanism supports near-instant exchanges between tokens pegged to different fiat currencies, allowing for faster international transfers.
For example, a payment in Japanese JPYC could be converted to US dollars via USDC in a matter of seconds on the same network, without intermediaries.
Circle said the FX engine is designed to meet financial compliance requirements, including full audit trails for institutional reporting.
How Circle is running Testnet
Arc is still being operated entirely by Circle engineers.
Every transaction on the testnet passes through internally maintained nodes, and partner banks connect through controlled access points rather than public blockchain wallets.
Several participants said Circle is using this phase to record system stress data: latency tracking, network performance, and compliance audit logs before opening them to external validators.
A draft regulation shared with banks sets out how institutions could then verify transactions directly, using licensed validation nodes linked to their existing regulatory oversight.
People involved in the pilot said a commercial launch date has not been agreed upon, but Circle has told partners that a transition to limited live testing could begin in 2026, depending on how the network performs under full institutional loads.
What the tests measure
Most testing in Arc focuses on practical clearing features, not retail payments.
Companies are using simulated transfers to move funds between corporate accounts in different countries, test currency conversions between stablecoins, and evaluate whether those transactions can be settled within existing compliance rules.
The banking engineers involved said they are comparing Arc’s audit and synchronization logs with traditional payment gateways such as SWIFT and Fedwire.
The idea is to see if blockchain infrastructure can meet the same reporting standards while reducing settlement windows from days to seconds.
Arc’s pilot overlaps with networks like JPMorgan’s Onyx and the Fnality platform, but unlike those systems, Arc is designed to support any compatible stablecoin, not just bank-issued tokens.
That makes it one of the few blockchain environments being tested simultaneously by global banks, payments companies, and stablecoin issuers.
Also read: OpenPayd Partners with Circle to Power Real-Time Stablecoin (USDC) and Fiat Transactions