Circle is building a four-layer financial stack around Arc, its new blockchain, as the company tries to carve out a bigger slice of the stablecoin market from Tether. The testnet launched in October 2025 and has already signed up more than 100 firms, including Goldman Sachs, Mastercard, and Visa. In the week ending July 15, the Arc testnet handled roughly 15 million transactions.
Arc testnet hits 15M weekly transactions
The testnet numbers suggest real demand, but the mainnet launch will be the real test. Circle's Q1 results show the company raised $222 million through an ARC token presale at a $3 billion valuation. Investors included BlackRock, a16z crypto, and ARK Invest. The company also received final OCC approval for a national trust bank, giving it a regulatory foothold that Tether lacks.
USDC's market share and revenue breakdown
USDC's market cap sits at $73 billion, down from $77 billion at the end of March. That's still far behind Tether's USDT, which is near $184 billion. Reserve interest produced 94% of Circle's first-quarter revenue — $653 million of $694 million. USDC handled 63% of stablecoin transaction volume in Q1, according to Visa Onchain Analytics, but that doesn't translate to market cap dominance.
Tether's dominance and Circle's uphill battle
Tether's USDT sees about $48 billion in 24-hour trading volume, roughly four times USDC's total. Tron alone carries about $89 billion in dollar-pegged stablecoins, exceeding USDC's entire supply. Tether also froze $131 million in Iran-linked USDT within hours of new US sanctions, showing its operational speed. Circle, by contrast, faced a Wisconsin criminal complaint for refusing to recover a scam victim's funds without a court order.
The Wisconsin complaint and regulatory hurdles
The complaint highlights a key difference: Circle follows court orders, Tether acts fast. The GENIUS Act, the 2025 US stablecoin law, steers regulated money toward USDC, while offshore trading keeps USDT flowing. But USDC's history includes a depeg to $0.88 in March 2023 after $3.3 billion of its reserves were frozen at Silicon Valley Bank. That scar still lingers.
Circle shares have collapsed roughly 76% from their post-IPO peak. The Arc mainnet launch will test whether new rails can pull liquidity from Tether. If the four-layer stack works, Circle might finally close the gap. If not, Tether's lead looks unassailable.
