Arc Mainnet, AI Agents, and Tokenized Markets | Nikhil Chandhok, CTO of Circle

Arc Mainnet’s launch is the beginning of Circle’s effort to build what CTO Nikhil Chandhok calls an “economic OS” spanning financial infrastructure and applications, not just another network. Arc targets transaction finality in about half a second, enabled in part by Circle’s acquisition of the company behind the Malachite consensus layer. Gas is paid in stablecoins, starting with USTC, with about 16 stablecoins launching on the network that day. Chandhok said this avoids the treasury and accounting burden of holding a separate native token, especially for businesses transacting in real-world assets.

Arc has more than 20 permissioned validators, a design Chandhok said may appeal to institutions that want to know who validates transactions. Contract deployment remains permissionless: developers do not need Circle’s approval or an account, and Circle does not control which contracts or chains users access. Arc Studio lets users interact with AI to deploy custom contracts, while developer kits support application building. Circle says Arc is immutable and gives the company no special ability to change transactions or roll back the chain; it is conducting continuous audits and helping application teams reduce security risks, but Chandhok declined to predict how Arc would handle a specific exploit.

Circle is developing a privacy option that would let users switch transactions between public and private through the same wallet interface. Arc uses trusted execution environments, which Chandhok said prevent Circle and validators from inspecting transactions, but require trust in the hardware manufacturer. Circle accepts that trade-off for now partly because of performance constraints. Post-quantum signatures were expected in beta “very soon.” The roadmap also includes faster transaction capabilities for emerging agents, though that work was still in progress.

Circle’s agent strategy is infrastructure-focused rather than centered on application products such as stock-picking agents. Chandhok sees cryptographic proofs supporting verification of agents’ identities, provenance, histories and claimed economic output, with trust mechanisms for agents analogous to the certificates and protocols used to verify websites. Circle has issued an agent stack and is developing discovery, reputation and work-history tools, an agent marketplace, and Nano Payments for transfers as small as one-millionth of a dollar. Stablecoin payments, fast settlement and credit markets could let agents borrow, earn, repay and direct other agents. Circle is also exploring whether agents with demonstrably profitable activity could borrow despite starting without capital.

Chandhok expects agentic commerce to emerge first in small tasks people have little incentive to do themselves, with specialized agents negotiating, completing work and getting paid online. Agents may handle the complexity of buying goods or perform services end to end, augmenting or replacing human work and taking on jobs too small or costly for people, including tasks worth two dollars. Some agents already trade on-chain, and newer systems can use credit cards through wallets with one-time authorization and spending policies, capabilities described as about a month old and not yet widely distributed. Chandhok cautioned that today’s agents are overly simple and that users will want to isolate data and share only what each agent needs.

Circle wants Arc to provide infrastructure and settlement for tokenized markets, not to operate an exchange for tokenized stocks. The company is seeking real-world-asset issuers and working on their needs, including chain features, liquidity, USDC ramps and geographic access. Chandhok expects tokenization to let existing market participants transact around the clock and broaden asset access for new participants, while companies seek more capital and investors seek access to tokens and stocks worldwide. Circle expects familiar EVM applications, such as automated market makers and lending protocols, alongside exchanges and larger asset issuers. Its StableFX work is intended to support currencies beyond the U.S. dollar.

Circle’s planned full-stack offering extends from stablecoin issuance and settlement to trading venues, liquidity pools and Circle products such as Circle Mint. The company is connecting private liquidity pools to Arc and developing RFQ and market-maker approaches to exchange USDC or other stablecoins with local currencies. Rather than issue stablecoins in more than 190 countries, Circle plans to work with local issuers; local-currency ramps will depend on liquidity and regulatory acceptance. Chandhok said Circle has handled nearly $1 trillion in USDC on- and off-ramping over the asset’s lifetime, largely through institutional access via exchanges, and retail-focused ramps are part of Arc’s launch. After close to 18 months of work, Circle’s next three months include privacy and agent features, adding validators as the network matures, and preparing a proof-of-stake launch.