Circle's Arc Aims to Shift Reserve Income Away from Coinbase

Circle's Arc is not about holding Treasuries, but rather a strategic move to capture reserve income on its own platform. On September 16th, Circle opened its Layer-1 blockchain, Arc, to the public, with eleven institutions securing the chain alongside it. These institutions include BlackRock, DTCC, Galaxy, Global Payments, ICE, Mastercard, MoneyGram, SBI, Standard Chartered, Sumitomo, and Visa.

These non-crypto native institutions are taking a position in a public chain, which may seem counterintuitive at first glance. However, this move is not about flow or governance, but rather about signaling their commitment to the technology.

The token, ARC, has a 10 billion supply with 25% allocated to Circle. Fees convert into ARC, which are then split between validators, stakers, and a burn. The whitepaper explicitly states that ARC does not represent any equity or debt claims on Circle.