Arc Unveils Sub-Second Stablecoin Settlement to Rewire $370B Cross-Border Payments Market

Key Takeaways

1. Arc, the Layer-1 blockchain developed by Circle (issuer of USDC), has announced a stablecoin-native, sub-second settlement model designed to replace legacy correspondent banking rails for cross-border payments.
2. Arc’s public testnet processed over 150 million transactions and onboarded ~1.5 million wallets in its first 90 days, averaging ~0.5-second settlement times. Peak throughput has been benchmarked above 30,000 TPS.
3. The global cross-border payments market was valued at USD 371.59 billion in 2025 and is projected to grow to USD 727.74 billion by 2034 at a 7.90% CAGR—with institutions spending an estimated $120 billion annually on transaction charges alone.
4. Arc’s deterministic finality, USDC-denominated gas fees, and programmable onchain infrastructure target the pain points of slow, opaque legacy rails—positioning it for remittances, global payouts, and trade finance.

Quick Recap

Circle’s Arc network has formally positioned itself as a programmable onchain alternative to legacy cross-border payment rails, introducing sub-second deterministic settlement with stablecoin-native execution. The announcement, shared via Arc’s official social channels, outlines a vision for an “Economic OS for the internet”—a full-stack infrastructure layer targeting remittances, global payouts, and trade finance. Notably, this comes as the Arc public testnet, launched on October 28, 2025 and, has already attracted participation from over 100 companies, including BlackRock, Goldman Sachs, Deutsche Bank, Visa, and Mastercard.

How Arc’s Programmable Settlement Works?

Arc is architected as a purpose-built, EVM-compatible Layer-1 blockchain optimized for stablecoin-based financial activity. Its core differentiator lies in three design pillars:

• In contrast to traditional blockchains that require users to hold volatile native tokens (e.g., ETH or SOL) for transaction processing, Arc charges network fees in USDC, thereby giving enterprises predictable, dollar-denominated operational costs.
• Deterministic Sub-Second Finality: Arc employs a Byzantine Fault Tolerant engine called Malachite, batching transactions every 300 milliseconds. Once confirmed, transactions are irreversibly final—no “six-block confirmation” delays or chain reorganization risk.
• Additionally, the network integrates privacy-preserving technologies for institutions that must protect sensitive transaction data while still demonstrating regulatory compliance to auditors.

Visa has already begun collaborating with Arc for stablecoin settlement infrastructure. In December 2025, Visa announced that Arc would support its global commercial activity onchain, alongside existing USDC settlement operations that have exceeded $3.5 billion in annualized volume. Meanwhile, Circle’s StableFX product—enabling 24/7 institutional FX trading between stablecoin pairs—has also been deployed on the Arc testnet.

Arc’s mainnet beta is planned for 2026, with Circle pushing toward broader validator participation, improved governance structures, and tighter integration with its payments and digital asset products.

Why This Matters Now: The Race to Replace Legacy Rails

The timing of Arc’s push is not coincidental. Cross-border payments have long been plagued by multi-day settlement, high fees, opaque routing, and fragmented correspondent banking networks. The World Bank and G20 have set ambitious targets for price transparency and full-value delivery in international transfers, creating regulatory tailwinds for stablecoin-based alternatives.

Several converging forces make 2026 a pivotal year:

• On the regulatory front, the U.S. GENIUS Act is providing a compliance scaffold for stablecoin infrastructure, while Europe’s MiCA framework formalizes stablecoin regulation for EU corridors.
• Institutional adoption: Visa and Mastercard are both building stablecoin settlement capabilities, with Visa’s USDC settlement expanding to U.S. banks in late 2025.
• Competitive pressure: Stripe acquired Bridge in 2025, embedding stablecoin-native payments and treasury tooling into its developer APIs. PayPal is experimenting with stablecoins for settlement. Ripple continues its enterprise push with on-demand liquidity.

The global remittance market alone—with India receiving over $125 billion annually—represents a massive corridor where stablecoin rails can dramatically reduce cost and settlement time.

Competitive Landscape

Arc enters a cross-border settlement space where blockchain-native competitors like Partior (backed by J.P. Morgan, DBS, and Temasek) and Ripple’s XRP Ledger are already operational. Below is a feature comparison focused on settlement infrastructure:

Arc leads in raw throughput and stablecoin-native design, making it the most attractive option for enterprises that want dollar-denominated, programmable settlement without volatile token exposure. Partior, however, holds a strategic advantage in institutional banking adoption: its permissioned model and J.P. Morgan backing give it direct access to wholesale banking flows and CBDC infrastructure that public chains cannot yet match. By comparison, Ripple’s XRP Ledger remains the most battle-tested public network for cross-border remittances, but its reliance on XRP as a bridge asset introduces token volatility that Arc’s USDC model explicitly eliminates.

Sci-Tech Today’s Takeaway

Overall, I think Arc might be the most consequential infrastructure play in stablecoins since USDC itself. In my experience covering fintech, the cross-border payments space has been littered with “faster, cheaper, better” promises—but what Circle is doing here feels structurally different. They’re not just building a faster pipe; they’re building the operating system that other pipes will run on.

What strikes me most is the stablecoin-native gas model. I’ve watched enterprises struggle with the absurdity of needing to hold volatile tokens just to move dollars onchain—it’s been a dealbreaker for treasury teams. Arc eliminates that friction entirely, and the 0.5-second average settlement on the testnet isn’t a theoretical number; it’s backed by 150 million transactions.

In general, I prefer to see real institutional skin in the game before calling something bullish, so the roster here—BlackRock, Goldman Sachs, Visa, Mastercard, and Deutsche Bank—is not a testnet vanity list. Visa is already running stablecoin settlement through this infrastructure. That’s not experimentation; that’s adoption.

Is it a guaranteed win? No. Partior has deep banking roots, and Ripple’s corridors are already live and moving money. Ultimately, Arc’s open architecture, combined with Circle’s existing USDC dominance and the regulatory tailwind from the GENIUS Act, therefore gives it a structural moat that’s hard to ignore. I’m bullish on this for long-term user adoption—especially in remittance corridors where every basis point of cost savings matters. This is one to watch very closely in 2026.