USDC on Arc: A Capital-Efficient Path for Banks

Circle Internet Financial's Arc is a blockchain infrastructure designed to help banks manage capital and operational risks associated with stablecoins like USDC and EURC, while aligning with global regulatory standards such as the Basel Committee's prudential guidance and CPMI-IOSCO principles. Arc's permissioned validator model and governance controls aim to provide clear classification conditions, allowing banks to potentially achieve a "Group 1b" treatment for digital assets, which would enable more favorable capital treatment and scalable balance-sheet economics. This infrastructure supports deterministic settlement finality, reducing operational uncertainties, and offers banks a clearer path to governance and risk management, which can improve regulatory compliance and operational resilience. By addressing critical infrastructure questions preemptively, Arc seeks to facilitate the adoption of stablecoins within mainstream finance, allowing banks to offer innovative USDC-based products while maintaining regulatory confidence and minimizing capital constraints.