Circle, issuer of USDC—the world’s second-largest dollar stablecoin—launched a new public blockchain, Arc, on September 16. Its founding validators include not only Circle itself, but also BlackRock, Visa, Mastercard, and the Depository Trust & Clearing Corporation (DTCC).
According to X user BonkGuy, several developers in the Arc ecosystem contacted him over the past few weeks to bring meme traders to Arc in its early stage. He believes the Arc team is borrowing from Robinhood Chain’s earlier cold-start playbook. Circle has previously said publicly that it hopes the community will rein in the supply of launchpads and meme coins so Arc can first be recognized as a payments and agent network. But with Pump.fun and BlackRock both appearing on the launch list, Circle clearly understands that a new chain is unlikely to get through a cold start if it completely blocks speculative traffic.
There are dissenting views as well. Research firm SoSoValue believes Arc will struggle to fully replicate Robinhood Chain’s cold-start conditions: the latter has Robinhood’s built-in retail traffic and quickly amassed active users early on through meme trading and low-cost mechanisms. Arc’s validator structure, token status, and trading infrastructure are all different, leaving open the question of whether it can form the same short-term trading flywheel.
$700 Million in Revenue, Only $34.4 Million Left
Behind the buzz, Circle’s real motivation for building this chain lies in its own income statement.
Circle’s business is straightforward: users exchange dollars for USDC, and Circle places those dollars in U.S. Treasuries and money-market funds to earn interest. In the second quarter this year, reserve income was about $668 million, accounting for roughly 95% of total revenue.
Much of that interest income must be shared out. Total revenue and reserve income were $701 million in the second quarter, while distribution, transaction, and other costs were about $412 million, leaving $289 million after those costs; after operating expenses, operating profit was only $34.4 million. The largest recipient is Coinbase, which took about $908 million in 2024, or roughly 54% of Circle-related revenue. Under the contract terms, after allocations to issuers and others, Coinbase also receives half of the remaining ecosystem revenue.
On its first day online, Arc processed 7.76 million transactions. Eighty-two percent of DEX trading volume came from meme-coin launchpads, with Arguspad alone accounting for $202 million and creating more than 80,000 new tokens within 24 hours.
The market is familiar with this kind of opening act.
The Benchmark Is Robinhood
On July 1 this year, Robinhood launched Robinhood Chain, built on the Arbitrum tech stack and focused on tokenized stock trading—users can trade tokenized exposures on-chain as if trading stocks, and use them for lending or as collateral. Co-founder Johann Kerbrat later explained that Robinhood Chain follows a “barbell strategy”: meme coins and real-world asset tokenization advance in parallel. It was not a case of starting with serious business only to have memes take over; it was designed that way from the outset.
On its first day, the chain’s DEX volume was only about $14.74 million. Arc, by contrast, recorded $410.8 million in DEX volume on day one—roughly 28 times that of Robinhood Chain. Looking at infrastructure alone, both chains launched with mature protocols such as Uniswap and Morpho already integrated. The more striking difference lies in what kind of capital arrived first: Robinhood Chain’s early funds were mostly parked in Morpho lending pools to earn yield, with 90% of its $100 million in total value locked during the first week coming from there; Arc, on the other hand, was dominated by launchpads on day one. The same infrastructure absorbed two entirely different kinds of capital.
Interest rates are another variable. Average USDC in circulation rose 25% year over year, but reserve yield fell 66 basis points, so total revenue increased by only 7%. Based on the average balance in the second quarter, every one-percentage-point change in yield changes annualized gross revenue by roughly $765 million.
USDC’s share on Circle-owned platforms—Circle Mint accounts, Circle Wallets, and other Circle-owned infrastructure—has already risen markedly. In the second quarter, USDC held daily on Circle platforms accounted for 19.5% of all USDC in circulation, compared with just 7.4% a year earlier. The share of revenue that Circle keeps from this portion is higher than from funds coming through distribution channels such as Coinbase and Binance. There is currently no direct evidence that Arc’s launch can push this share still higher; it is only an inference suggested by the structure of the financial statements.
A Payments Entry Point
Beyond building its own chain, Circle also wants to reach into the payments and settlement layer. AI agents do not have credit cards and cannot pay API-call fees. The x402 protocol addresses this by activating HTTP’s long-dormant “402 Payment Required” status code: a website quotes a price, a machine signs the payment, and a “facilitator” verifies it and submits it on-chain. Coinbase open-sourced the protocol in May 2025.
The key point is that x402 is an open protocol, and anyone can operate the “facilitator” layer. Coinbase operates its own x402 Facilitator, which initially supported Base and later expanded to Polygon and Solana, providing infrastructure for payment verification, settlement, gas sponsorship, and more. On September 16, Circle launched its own Facilitator Service, likewise supporting Base and Polygon while adding support for Arc. In other words, Base itself still belongs to Coinbase, but Base developers integrating payment functionality can now choose Circle’s settlement service instead of necessarily using Coinbase’s—the ownership of the chain has not changed, but in the payments-services layer Circle has moved directly into Coinbase’s territory. On September 19, Arc officially announced payment functionality for AI agents, further completing this line of business.
On September 21, Circle also announced that Circle Mint customers can deposit native BTC, mint one-to-one backed cirBTC, and directly borrow USDC against cirBTC collateral through third-party lending markets on Arc and Ethereum. Coinbase has long had its own Bitcoin-mapped asset, cbBTC; Circle is now beginning to bring BTC into its own stablecoin and payments infrastructure as well.
Competitors on the Same Track
Circle is not the only player in this field. Tempo, from Stripe and Paradigm, launched its mainnet on March 18. It has no native token, and fees can be paid in any dollar stablecoin. Tether-backed Plasma and Stable are pursuing the same path. The total stablecoin supply is about $308 billion, with Ethereum and Tron together still carrying roughly 80%. What new chains are competing for is the existing stock already settled on older chains.
Circle has made the opposite choice from Tempo: on September 16, Circle completed the Genesis Mint of 10 billion ARC, becoming the first publicly listed company to complete a native-token mint for a native network. But Circle has not committed to a public issuance of ARC, and plans to explore moving Arc from its current PoA consensus to PoS in 2027. Its first private fundraising round in May was about $222 million, implying a $3 billion valuation.
The $650 million in on-chain USDC on Arc on its first day is still less than 1% of USDC’s total circulating supply; the share of Circle’s own channels, while up from 7.4% a year ago to 19.5%, has also not yet reached a level that can alter the balance of revenue-sharing power. Both figures are still small for now. Circle wants to carve out Coinbase’s territory in payments and keep increasing the share of its own channels. Whether this chain can truly move those two figures higher will become clearer in earnings reports over the next few quarters.
- This article is for reference only and does not constitute investment advice. Markets involve risk; invest with caution.