Circle's Arc Blockchain Raises $222M at $3B Valuation

The latest funding round included participation from SBI Group, Janus Henderson Investors, General Catalyst, Marshall Wace, IDG Capital, Haun Ventures, and Bullish, expanding the investor base beyond the initial major institutional investors. As reported by CNBC, Circle CEO Jeremy Allaire emphasized that "we want to build an operating system that has many, many stakeholders in it ... major companies who are running the infrastructure with us and who ultimately help to govern it." The company is entering the operating system business and the apps business, creating a multi-stakeholder distributed model with a token and distributed network. Circle holds a 25% stake in Arc's initial supply of 10 billion tokens, allowing participation in operating validator infrastructure, generating fee revenue and earning staking income. The majority of tokens, 60%, will go to participants who build on, use and contribute to the Arc network, while the remaining 15% will be allocated to a long-term reserve. This creates a governance model where investors should follow transactions, asset issuance and success on the network found by the developer community.

Circle reported robust financial performance in Q1 2026, with total revenue and reserve income climbing 20% year-over-year to $694 million. As reported by CNBC, earnings per share of 21 cents beat expectations by 3 cents, based on a survey of analysts by LSEG, though revenue of $694 million fell short of the $722 million expected. USDC circulation expanded by 28% to reach $77 billion by the end of the quarter, while on-chain USDC transaction volume surged to $21.5 trillion, representing a 263% increase compared to the same period last year. The company's Payments Network reached an annualized transaction volume of $8.3 billion as of March 31, driven by growing adoption of blockchain-based payment infrastructure among businesses and institutions. Despite strong operational growth, adjusted EBITDA rose by 24% to $151 million, though net income from continuing operations declined 15% to $55 million due to increased operating expenses that jumped 76% following the company's public listing. Circle shares were up more than 2% in trading on Monday, following the funding news as well as the company's mixed first-quarter results.

As outlined in the whitepaper, Arc positions itself as "The Economic OS for the internet" and serves as infrastructure for payments, lending, tokenized assets, foreign exchange, and AI-driven financial services. The project plans to launch with an initial supply of 10 billion ARC tokens, with allocation split as 60% to the ecosystem, 25% to Circle, and 15% to long-term reserves. The tokenomics include a burn mechanism tied to network fees and a relatively low annual inflation target of roughly 2-3% that declines over time. Unlike existing Layer-1 networks, Arc plans to support stablecoin-denominated fees to provide more predictable transaction costs for institutions and enterprises. The network uses USD Coin as its native gas token and offers sub-second transaction finality, EVM compatibility, and opt-in privacy functionality aimed at enterprise users. Arc is structured as a coordination layer for financial activity that allows validators to operate network infrastructure, enables staking rewards and fee generation, and supports real-time payment execution for institutional adoption. As reported by CNBC, Allaire noted that "the economy is becoming increasingly machine-operated, with AI agents handling more of the operational and contractual work currently managed by humans."

Arc represents a strategic shift for Circle, which historically depended on third-party blockchains like Ethereum and Solana for USDC settlement and distribution. By developing its own blockchain infrastructure, Circle could potentially reduce its reliance on external networks and distribution partners like Coinbase. The launch of Arc enables the company to control its own blockchain ecosystem, providing greater autonomy in stablecoin operations and settlement processes. This infrastructure independence aligns with Circle's broader vision of becoming an AI-powered financial operating system, as outlined by CEO Jeremy Allaire. As reported by CNBC, Allaire described Arc as "running the actual economy" beyond just stablecoins and payments, noting it can "run the actual economy, it's every contract that undergirds those financial relationships ... the systems of governance that we use to govern all these economic institutions." Arc is designed for institutional capital markets, regulated financial activity, and tokenized assets, supporting cross-border settlement use cases and stablecoin-based capital markets. The company is expanding developer tools that support AI agent integration, allowing automated financial operations and connecting blockchain infrastructure with AI-driven financial tools. Circle's token presale marks a watershed for corporate tokenization, as the first publicly listed company to conduct such a raise, testing whether traditional capital markets can coexist with token-based fundraising and governance models.