Circle Launches StableFX on Arc Blockchain to Transform Foreign Exchange Trading
Circle has unveiled StableFX, an institutional-grade foreign exchange engine that operates on its Arc blockchain network. The USDC issuer announced this development alongside Circle Partner Stablecoins, creating a comprehensive infrastructure for global currency trading. These offerings aim to address longstanding inefficiencies in the foreign exchange market through blockchain technology.
How StableFX Modernizes Currency Trading on Arc
StableFX enables 24/7 trading of stablecoin currency pairs with on-chain settlement capabilities. The platform uses a request-for-quote execution model that connects institutions with multiple liquidity providers. This approach delivers competitive pricing with low slippage while employing atomic settlement to reduce counterparty risk.
The engine features on-chain settlement where both payment and delivery occur simultaneously, eliminating the risk that one party fails to deliver funds. This capability addresses a critical vulnerability in traditional foreign exchange transactions. StableFX’s all-to-all model eliminates the need for bilateral agreements with multiple counterparties, simplifying onboarding and accelerating access to deep, global liquidity.
The platform operates through Arc’s Layer-1 blockchain, which went live on testnet in October 2025. Over 100 participants have joined the testnet, including BlackRock, Visa, Goldman Sachs, Deutsche Bank, Standard Chartered, BNY, State Street, Mastercard, Coinbase, and Kraken.
Circle Partner Stablecoins Expands Arc’s Currency Ecosystem
Circle simultaneously launched the Partner Stablecoins program, which integrates regional stablecoins tied to different fiat currencies. Members must meet eligibility standards related to technical and operational capabilities, reserve management, and risk management.
Initial participants include Avenia (Brazilian real), Forte (Australian dollar), JYPC (Japanese yen), Juno (Mexican peso), Busan Digital Asset Custody Services (South Korean won), Stablecorp (Canadian dollar), Luno (South African rand), and Coins.ph (Philippine peso). These stablecoins gain integration into Circle’s Payments Network and StableFX.
By participating, stablecoin issuers gain integration in real-world payments, remittance, and FX flows through Circle Payments Network and StableFX. This increases utility and impact across various financial activities. The initiative creates interoperability with USDC, supporting enhanced liquidity for participating currencies.
Arc Blockchain Technology Powers Foreign Exchange Innovation
Arc is an open Layer-1 blockchain purpose-built for stablecoin finance that delivers enterprise-grade performance. The platform uses USDC for transaction fees, features sub-second finality, and includes opt-in privacy configurations designed for institutional compliance requirements.
Arc introduces key features optimized for stablecoin finance: USDC as native gas providing low, predictable, dollar-denominated fees; a built-in FX engine with an institutional-grade RFQ system for 24/7 on-chain settlement; and instant finality powered by Malachite consensus engine. These capabilities address common concerns from financial institutions regarding public blockchain limitations.
Currently live on Arc testnet, StableFX is available for approved institutions that have completed Know-Your-Business and Anti-Money Laundering verification ahead of Arc’s planned 2026 mainnet launch. Circle CEO Jeremy Allaire noted the project has shown remarkable early momentum during the testnet phase.
Targeting Foreign Exchange Market Inefficiencies
The foreign exchange market is the largest financial market globally, yet much of it still runs on outdated infrastructure, including fragmented venues, prefunded accounts, and T+1 settlement cycles. Circle’s offerings directly address these structural limitations through blockchain-based solutions.
Circle Chief Product and Technology Officer Nikhil Chandhok stated: “With StableFX and Circle Partner Stablecoins, we’re connecting currencies on Arc”. This vision aims to transform FX into the connective tissue of a borderless financial system where liquidity flows freely and settlement happens instantly.
The announcement follows Circle’s strong third-quarter performance. The company reported $740 million in revenue and reserve income, surpassing analyst forecasts by 66% year over year. USDC’s market capitalization has risen from $61 billion at Circle’s June IPO to over $76 billion.
Conclusion
Circle’s launch of StableFX and Partner Stablecoins on Arc represents a significant development in foreign exchange infrastructure. These tools create an architecture for modernizing global currency trading through programmable, continuous settlement. The platform’s integration of institutional safeguards with blockchain efficiency positions it to address critical pain points in traditional FX markets.
