Shares of Circle (CRCL), the issuer of the USDC stablecoin, fell by 6% amid fallout from the Senate vote on the Clarity Act, the legislation aimed at establishing a regulatory framework for digital asset markets in the United States. The decline came despite the company launching its latest product: Arc, a new layer-1 blockchain that has now gone live on mainnet.

The drop extended a difficult stretch for the stock. CRCL slid from $86 to $80 during the session and is now down almost 14% over the past seven days, though it remains up 12% over the past year. The sell-off arrived one day after Cathie Wood's Ark Invest sold off $14 million worth of Circle stock across two of its exchange-traded funds.

Arc Mainnet Goes Live With Institutional Backing

Circle first moved Arc into testnet in October 2025, and the public mainnet launch marks a new milestone for the network. According to Circle's official announcement, Arc is a public layer-1 network designed for onchain finance. It launches with full integration into the Circle ecosystem and uses USDC as its gas token. As a layer-1, Arc runs as a base blockchain that processes and settles its own transactions rather than operating on top of another chain, and routing gas fees through USDC ties everyday network activity directly to the stablecoin at the center of Circle's business.

Circle CEO Jeremy Allaire described the launch as the biggest in the firm's history since the debut of USDC. He called the network the "embodiment of the premise we have operated on for thirteen years: money should work the way the internet works."

Allaire added that Arc is designed for the onchain and agentic economy, with the network serving as an open, neutral operating system for the Internet.

The network carries substantial institutional backing at launch. Its founding validators include Mastercard, Visa, BlackRock, ICE, and DTCC, with Standard Chartered, MoneyGram, Galaxy, Sumimoto, WorldPay, and SBI Group also set to participate. The validators are expected to join the network in phases, and the lineup spans payments companies, banks, asset managers, and market infrastructure firms, aligning with the institutional audience the network is built to serve.

While Arc is designed to be public, Circle has built in a privacy option for confidential transactions. Other features include sub-second finality, interoperability, and institutional security.

Circle Mints 10 Billion ARC Tokens

Circle also became the first publicly traded company to mint a token, issuing 10 billion ARC tokens for the new network. There is no indication yet of whether the tokens will actually be launched. The company has previously described the minting as a technical milestone rather than a commitment to launch them, and it is exploring a transition of Arc from proof-of-authority to proof-of-stake, with the ARC token expected to play a role in that shift. The distinction matters for how the network evolves: proof-of-authority chains rely on a fixed set of approved validators, while proof-of-stake networks typically tie participation to holding and staking the native token. Whether the minted supply is ever released, and how any such transition would proceed, remain open questions now that the mainnet is live.

Major DeFi Applications Deploy on Arc

Even before any native token launch, Arc is already home to several major DeFi applications. More than 100 applications are launching on the network, including the lending platforms Aave and Morpho as well as decentralized exchanges such as fomo, Pump.fun, Uniswap, and Aero. The network also supports the Ethereum Virtual Machine (EVM), which means Ethereum-compatible apps can easily deploy on Arc. With lending and trading venues among the launch cohort, the chain begins life with core onchain finance functions already in place.

This article is for informational purposes only and does not constitute financial or investment advice. Investing in stocks and digital assets involves risk, and blockchain launches do not guarantee adoption, revenue growth, or share-price performance.

Originally published by The Market Periodical.