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Circle’s New Blockchain, Arc, Raises Concerns Over Centralization and Governance
In a recent announcement, financial technology firm Circle revealed plans to launch its own Layer 1 (L1) blockchain, dubbed Arc. This new endeavor aims to establish itself as foundational infrastructure for regulated money movement, supporting the creation of a globally distributed financial system.
Circle emphasizes that Arc will be fully integrated with its existing platform while maintaining interoperability with dozens of other partner blockchains. The public testnet is slated for release between September and December 2025.
This newly unveiled blockchain, designed to host regulated real-world assets (RWAs) such as tokenized equities, bonds, private credit, and institutional-grade funds, will also allow for AI-powered treasury management tools. Furthermore, Arc’s performance targets include up to 10,000 transactions per second with sub-second finality using only 20 validators.
However, concerns have been raised over the potential centralization of governance and security issues stemming from Circle’s consortium chain model. Critics argue that the design necessitates a closed, consortium-based structure, which could undermine the decentralized ethos of blockchain technology.
Some experts suggest that launching another Layer 1 is unnecessary, especially for stablecoins like USDC, as such systems may struggle without diverse assets or strong DeFi ecosystems.
Source: cryptoslate.com
