Arc Network

USDC-Native L1 Blockchain·Active·Global (US-jurisdictional)

Circle's stablecoin-native L1 blockchain. EVM-compatible, USDC-as-native-gas, Malachite BFT consensus. Public testnet launched October 2025, mainnet planned for 2026. Backed by Circle (NYSE: CRCL) with institutional partners including Goldman Sachs, Mastercard, and Visa.

M69 Score

Methodology →

2.0

Minimally aligned

Monetary Sovereignty

1.9

Civilizational Durability

1.9

Universal Adoption

2.4

Framework v0.2-alphaRated today

M69 Verdict

Arc is a stablecoin-native Layer-1 blockchain developed by Circle Internet Group, the issuer of USDC. Announced on August 12, 2025, with public testnet launched on October 28, 2025, Arc is EVM-compatible, uses USDC as native gas, and uses the Malachite BFT consensus engine. Mainnet is expected in 2026. Arc is purpose-built for institutional stablecoin payments, FX, and capital markets, with explicit opt-in privacy and direct integration with Circle's institutional stack. From an M69 perspective, Arc is fundamentally a fiat-rails project — it exists to extend USDC's reach. USDC is a 1:1 USD-pegged, fully fiat-backed stablecoin issued by a regulated US company that maintains a documented blacklist (372+ blocked addresses), requires KYC for redemption, and depends on US Treasury holdings and partner banks. Building an L1 around USDC as native gas inherits all of those fiat dependencies and centralization vectors at the chain layer. Arc scores poorly against the Money2069 vision because its core monetary asset is fiat-pegged USD-denominated debt-backed money issued by a single regulated company, gas is the same fiat asset, validators are expected to be permissioned at launch, and Circle retains the ability to freeze USDC balances on Arc.

Key Findings

Strongest categories are Spending Power Stability (2.8) and Traction (2.5).

USDC has a near-flawless 7+ year peg track record (with one SVB-related depeg) and Arc enters mainnet with serious institutional partners (Goldman, Mastercard, Visa) and a well-funded parent (Circle, publicly traded). Operationally, this is a credible launch.

Weakest categories are Fiat Independence (1.3), Governance (1.5), and Issuance Model (1.6).

Arc is fiat-pegged by design: USDC is native gas, USDC is the primary asset, USDC is issued by a single regulated US company, and USDC's reserves are USD cash and Treasuries. The Money2069 vision of debt-free, fiat-independent money is structurally incompatible with Arc's thesis.

Censorship and centralization are first-order concerns.

Circle maintains an active blacklist of 372+ USDC addresses, can freeze any user's USDC balance, and operates under US jurisdiction. Arc inherits all of this. The litepaper's 'opt-in privacy' framing — explicitly for 'compliance with own obligations' — confirms surveillance-readiness rather than privacy-as-monetary-right.

Genuine engineering quality lifts Resilience to 2.3.

Malachite consensus and the quantum-resistant roadmap are real strengths, but this technical strength is the most 'M69-orthogonal' dimension; sound engineering does not redeem a monetary stack built on fiat-collateralized centrally-controlled USD.

Marketing 'openness' cannot offset asset-layer centralization.

Arc's marketing presents it as 'open,' 'market-neutral,' and 'the Economic OS for the internet,' but the underlying monetary asset is the most centralized, KYC-gated, blacklist-enforced major stablecoin. The chain layer's openness cannot offset the asset layer's centralization, because the asset *is* the money.

M69 Score

M69 Alignment2.0

Minimally aligned

1.02.03.04.05.0

Monetary Sovereignty1.9

Issuance (3x) + Stability (2x) + Fiat Indep. (2x)

Civilizational Durability1.9

Sovereignty + Governance + Resilience

Universal Adoption2.4

Traction (2x) + Inclusivity

Iss Mod3x

1.6

Stability2x

2.8

Fia Ind & Int2x

1.3

Traction2x

2.5

Sovereignty

1.8

Governance

1.5

Resilience

2.3

Inclusivity

2.1

Scored against the Money2069 Manifesto — see methodology. Higher = more aligned.

Detailed Rating Breakdown

Issuance Model3x

1.6

Code	Question	Score
IM-01	Is issuance permissionless?USDC, Arc's native gas/money, is minted exclusively by Circle, a single regulated US issuer. No permissionless issuance exists. [1]	1
IM-02	Is new supply created through debt?USDC is issued against fiat USD reserves held in cash and US Treasuries — effectively against bank deposits/sovereign debt instruments. [1]	2
IM-03	Is issuance tied to measurable real-world economic activity?USDC supply expands/contracts purely with USD inflow/outflow, not real-economy indices. [1]	1
IM-04	Does the issuance model have a supply cap or hard ceiling?No cap; USDC supply is fully elastic to USD reserves but only via Circle's discretion. Not an M69-style elasticity tied to real economy. [1]	3
IM-05	Can supply contract (burn/redemption) as well as expand?Yes — USDC supports redemption/burn, but only via KYC-gated Circle channels. [1]	1

Spending Power Stability2x

2.8

Code	Question	Score
SPS-01	What mechanism does the protocol use to target spending power stability?USDC's $1 peg is maintained by 1:1 reserve backing and Circle redemption arbitrage; not algorithmic, but a real, documented mechanism. [1]	3
SPS-02	What benchmark is used to measure spending power?Single fiat reference: USD. Moderate stability with persistent USD inflation. [1]	2
SPS-03	How transparent and verifiable is the stability measurement?USDC reserves attested monthly by third-party auditor; on-chain monitoring of price exists; methodology partly off-chain. [1]	3
SPS-04	What is the protocol's historical deviation from its stability target?USDC has held within ~2% of $1 since 2018 with one notable SVB-related depeg event in March 2023 (briefly to ~$0.87). Strong but not flawless. [1]	4
SPS-05	Does the protocol distinguish between short-term volatility and long-term purchasing power drift?Targets short-term $1 peg only; no mechanism for USD inflation/purchasing-power drift. [1]	2
SPS-06	Is the stability mechanism accessible globally?USDC circulates globally and the peg mechanism functions identically across geographies; redemption is KYC-gated and US-jurisdiction restricted. [1]	3

Fiat Independence & Interoperability2x

1.3

Code	Question	Score
FI-01	What is the protocol's unit of account?USD — hard-pegged via USDC as native gas and dominant asset. [1]	1
FI-02	What is the fiat composition of the protocol's collateral or reserves?USDC reserves are ~100% USD cash + US Treasuries. Arc's native asset is fully fiat-backed. [1]	1
FI-03	Does the protocol depend on fiat banking infrastructure to function?USDC issuance/redemption depends on partner banks (BNY Mellon, others); without banking rails USDC's peg collapses. [1]	1
FI-04	Are the protocol's price feeds and oracles fiat-denominated?Built-in FX engine and pricing all fiat-denominated; USD is the reference. [1]	1
FI-05	What happens to the protocol if the primary fiat currency it references collapses or depegs?A USD collapse would devastate USDC and therefore Arc's entire monetary base; no independence mechanism. [1]	1
FI-06	Does the project have a credible transition path from fiat-dominated adoption to fiat-independent operation?No transition path; Arc's entire thesis is to expand fiat-stablecoin rails. [1]	1
FI-07	Can local or sectoral currencies be denominated in or settle against this currency?EVM-compatible chain in principle allows other tokens, including EURC (Circle's euro stablecoin) and tokenized assets; multi-currency capable but no evidence of local/community currencies. [1]	2
FI-08	Does the protocol define open standards for interoperability with other monetary systems?Uses CCTP for USDC interop and supports multichain alignment, but no open standard for monetary coordination beyond Circle's own bridges. [1]	2

Traction2x

2.5

Code	Question	Score
TR-01	Is the project still active?Fully active; in public testnet ahead of 2026 mainnet. [1]	5
TR-02	How long has the project been in existence?Announced August 2025; testnet October 2025. Under 1 year. [1]	1
TR-03	How many active users does the project have?Testnet only; no mainnet user base. No verifiable user count. [1]	1
TR-04	How many businesses or organizations accept the project's currency?USDC is broadly accepted globally; on Arc specifically — testnet only, no merchant base. Scoring Arc itself, not USDC at large. [1]	1
TR-05	Is the currency used as a unit of account?Arc has no live native currency; USDC is used as gas in testnet but functions as a USD equivalent, not an independent unit of account. [1]	2
TR-06	Is the founder or core team still actively working on the project?Circle (Jeremy Allaire) and the Malachite team from Informal Systems are actively developing it. [1]	5
TR-07	What partner organizations or institutions support or integrate the project?Goldman Sachs, Mastercard, Visa, and others named as partners; multiple meaningful institutional relationships. [1]	4
TR-08	Is the project covered or recognized by credible external sources?Significant coverage in Cointelegraph, CoinDesk, CoinGecko, Coin Bureau, The Defiant, fintech media. [1]	4
TR-09	Is adoption organic — not dependent on subsidies, incentives, or mandates?Testnet adoption being incentivized via airdrop farming/expected native token launch. [1]	2
TR-10	What is the growth trend over the past 12 months?Strong upward trajectory pre-mainnet — testnet active, partners growing. [1]	4
TR-11	Does the project have a coherent narrative and cultural identity that drives long-term commitment?Strong corporate narrative ('Economic OS'), but community is transactional/financial; no cultural identity beyond Circle's brand. [1]	2

Sovereignty

1.8

Code	Question	Score
SO-01	Can any single entity shut down the project?Circle controls USDC (which is Arc's native gas) and can freeze it; the chain itself would be operated initially by permissioned validators. Effective single-entity control. [1]	1
SO-02	Is the project's core infrastructure permissionless and self-hostable?Stated that core software will be released under a permissive license; testnet is permissioned today. [1]	2
SO-03	Is the project subject to the jurisdiction of a single nation-state?Circle is a US-regulated entity; Arc operates under US jurisdictional capture risk. [1]	1
SO-04	Does the project control or custody user funds?At the chain layer, wallets are self-custodial (EVM standard); however, USDC redemption is custodial through Circle. Mixed. [1]	3
SO-05	Is the project resilient to key-person risk?Backed by Circle as an institution (~1000+ employees); not a single-person project. [1]	4
SO-06	Does the project depend on any third-party service that could be revoked?Depends on Circle's USDC issuance, US banking partners, and bridges — critical dependencies. [1]	2
SO-07	Can the project be censored — can specific users or transactions be blocked?Circle maintains an active USDC blacklist (372+ addresses); the blacklist applies across all chains where USDC circulates, including Arc. [1]	1
SO-08	Does the protocol protect transaction privacy as a monetary right?Arc has opt-in privacy via selectively shielded balances; intended for 'compliance with own obligations' — not surveillance-resistant by default. [1]	3
SO-09	Does the technology enforce the project's monetary rules such that governance cannot silently override them?Circle can freeze USDC unilaterally; chain consensus is BFT but monetary asset is fully overridable by issuer. [1]	1

Governance

1.5

Code	Question	Score
GO-01	How are decisions about the project made?Currently fully Circle-controlled corporate decision-making; native token and verifiable governance are stated future goals but not yet operational. [1]	2
GO-02	Who has voting or decision-making power, and how is that power distributed?Circle Internet Group holds unilateral decision power today. [1]	1
GO-03	Is the governance process — and the monetary mechanism itself — transparent and publicly auditable?Monthly reserve attestations for USDC are public; governance over Arc itself is corporate and largely opaque. [1]	2
GO-04	Can governance be captured by a small group or hostile actor?Already structurally captured by Circle (the company). [1]	1
GO-05	How are upgrades and changes to the protocol or project proposed and executed?Circle controls upgrades; no community veto. [1]	2
GO-06	Is there a separation between governance over monetary policy and governance over operational decisions?No formal separation; USDC monetary policy and Arc operational policy both flow from Circle. [1]	1
GO-07	Does the project have a constitution, charter, or set of immutable principles?Litepaper articulates design principles ('market-neutral,' 'open'), but these are not constitutionally protected. [1]	2
GO-08	Can the project's issuance rules be changed, and are monetary policy changes subject to stronger constraints than operational changes?Circle can change USDC supply rules unilaterally; no on-chain constraint. [1]	1

Resilience

2.3

Code	Question	Score
RE-01	Has the project survived a major crisis or adversarial event?Arc itself is testnet; no live crisis. USDC (the underlying asset) survived SVB depeg in March 2023, but Arc as a chain has no adversarial track record. [1]	1
RE-02	Does the project have redundancy in its critical infrastructure?Currently small validator set (4-20 testnet validators); limited redundancy at chain layer; bridges via CCTP. [1]	2
RE-03	Can the project recover from a catastrophic failure?Permissive-license codebase planned, BFT consensus standard; no documented disaster recovery plan. [1]	3
RE-04	Is the project's design simple enough to be maintained and understood long-term?EVM + Malachite consensus is a known, well-documented stack; complexity is moderate. [1]	3
RE-05	Is the project dependent on a specific technology that could become obsolete?EVM-compatible with multi-language interop; quantum-resistant roadmap announced. [1]	4
RE-06	How does the project handle economic stress?No native stress mechanisms; imports USDC's macro stability dependence — bank run on Circle would impact Arc directly. [1]	1
RE-07	Does the project have sustainable funding for long-term maintenance?Backed by Circle, a public company (NYSE: CRCL) with significant revenue from USDC reserves. Multi-year funding secured. [1]	5
RE-08	Can the system operate across extreme latency, disconnected networks, and multi-century timescales?Tendermint/BFT consensus requires low-latency global connectivity; not designed for partition operation. [1]	2
RE-09	Is the system designed for a world where AI agents are primary economic actors?EVM-compatible; AI agents can interact via standard smart contract interfaces. [1]	3

Inclusivity

2.1

Code	Question	Score
IN-01	Can anyone in the world participate regardless of nationality, wealth, or status?USDC requires KYC for redemption; Circle blocks sanctioned addresses. Sending/receiving USDC on-chain is technically permissionless but the asset itself can be frozen for any user. [1]	2
IN-02	What is the minimum cost to start using the project?Low, dollar-denominated gas via USDC; designed for predictable, low fees. [1]	4
IN-03	Does the project actively serve underbanked or financially excluded populations?Targets institutional finance (Goldman, Mastercard, Visa); not designed for underbanked. [1]	1
IN-04	Does the project distribute economic benefits — including seigniorage — broadly, or concentrate them among insiders?All USDC seigniorage (interest on Treasury reserves) flows to Circle shareholders; Arc native token TBD with no announced distribution. [1]	1
IN-05	Does the project treat all participants equally under the same rules?At chain layer, EVM treats all addresses equally; at asset layer, Circle can freeze any user. Institutional onboarding is privileged. [1]	2
IN-06	Does the project require identity documentation or surveillance to participate?On-chain interaction is pseudonymous; USDC redemption to fiat requires KYC. Opt-in privacy exists for shielded balances. [1]	3
IN-07	Does the project have mechanisms to prevent wealth concentration over time?No anti-concentration mechanisms; institutional-first design favors large holders. [1]	2

Frequently Asked Questions

What is Arc Network and what problem does it solve?

Arc is a stablecoin-native Layer-1 blockchain developed by Circle Internet Group (issuer of USDC). Announced August 2025 with public testnet launched October 28, 2025, Arc is EVM-compatible, uses USDC as native gas, and runs on the Malachite BFT consensus engine. It is purpose-built for institutional stablecoin payments, FX, and capital markets, with mainnet planned for 2026.

How is money created on Arc Network?

Arc itself does not issue money — its core monetary asset is USDC, minted exclusively by Circle, a single regulated US issuer. USDC is created against fiat USD reserves (cash and US Treasuries) held by Circle. No permissionless issuance exists, and there is no supply cap; supply expands and contracts purely with USD inflow/outflow at Circle's discretion.

How does Arc maintain stable spending power?

Stability comes entirely from USDC's 1:1 USD peg, maintained through full fiat reserve backing and Circle redemption arbitrage. USDC has held within ~2% of $1 since 2018 with one notable SVB-related depeg in March 2023 (briefly to ~$0.87). Reserves are attested monthly by a third-party auditor. The mechanism targets the short-term $1 peg only and has no mechanism for long-term USD inflation drift.

Is Arc Network independent from fiat currencies?

No. Arc is structurally a fiat-rails project. USD is the unit of account, USDC is native gas, and USDC reserves are ~100% USD cash plus US Treasuries. Issuance and redemption depend on partner banks (BNY Mellon and others). A USD collapse or Circle banking-partner failure would devastate the entire stack, and no transition path toward fiat independence is articulated.

How is Arc Network governed?

Currently Arc is fully Circle-controlled through corporate decision-making. Circle Internet Group (NYSE: CRCL) holds unilateral decision power, controls upgrades, and can change USDC issuance rules. A native governance token and proof-of-stake transition are stated future goals but not operational. There is no formal separation between monetary and operational governance.

Can Arc Network be censored or shut down?

Yes. Circle controls USDC (Arc's native gas) and can freeze any user's balance. Circle maintains an active USDC blacklist of 372+ addresses that applies across all chains where USDC circulates, including Arc. The testnet runs on permissioned validators, and Circle operates under US jurisdiction. Effective single-entity control exists at both the asset and chain layer.

How resilient is Arc Network?

Arc has no live mainnet and therefore no adversarial track record. Strengths include a public-company parent (Circle, NYSE: CRCL) providing sustainable funding, a well-engineered BFT consensus stack (Malachite, from Informal Systems), EVM compatibility, and a stated quantum-resistant roadmap. Weaknesses include a small testnet validator set, no documented disaster recovery, and full economic dependence on USDC's banking infrastructure.

Who can participate in Arc Network?

On-chain interaction is technically permissionless and pseudonymous, but USDC redemption to fiat requires KYC, and Circle can freeze any user's balance. Arc is designed for institutional finance with named partners including Goldman Sachs, Mastercard, and Visa — not for underbanked populations. Opt-in privacy via selectively shielded balances exists but is framed for 'compliance with own obligations,' not as a monetary right.

What is the M69 alignment score for Arc Network and why?

Arc Network scores 2.0/5.0 (Minimally aligned) on the M69 framework. Its strongest categories are Spending Power Stability (2.8) — thanks to USDC's 7+ year peg track record — and Traction (2.5), with serious institutional partners. Its weakest categories are Fiat Independence (1.3), Governance (1.5), and Issuance Model (1.6). Arc is well-engineered fiat-rail infrastructure but sits near the opposite end of the spectrum from the Money2069 vision of debt-free, sovereign, fiat-independent money.

Who is behind Arc Network?

Arc is developed by Circle Internet Group, the US-regulated issuer of USDC and a publicly traded company (NYSE: CRCL) led by CEO Jeremy Allaire. The consensus engine, Malachite, comes from the Informal Systems team, which Circle acquired specifically for Arc. Named institutional partners and design collaborators include Goldman Sachs, Mastercard, and Visa, among others.