Circle Unveils Arc Blockchain with USDC Transaction Fees

Circle is set to launch its own Layer 1 blockchain, Arc, on September 16. This will allow users to pay transaction fees in USDC, the world's second-largest dollar stablecoin, which Circle issues through HashedCircle.

This design choice marks a significant shift from traditional blockchains that require users to hold native tokens for gas fees. For example, sending USDC on Ethereum requires both USDC and ETH for transactions. This has led to users managing multiple types of tokens and companies holding volatile virtual assets.

Arc's mainnet will use USDC as the base currency, eliminating the need for separate token holdings. As transaction fees are paid in USDC, this could lead to increased demand for the stablecoin on the Arc network. This vision has been a year in the making, with Circle unveiling the Arc project in August 2022.