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This is the 95th edition of The Web3 + AI Daily - your definitive guide to the intersection of blockchain and AI! On the agenda today is Circle, its recently-unveiled blockchain Arc, and Jeremy Allaire‘s vision for the future of AI-driven economy.
Thank you for being here! Let’s dive in.
Circle Launches Arc: The Economic OS for the Internet
Circle, the company behind one of the most successful stablecoins in existence, USDC, recently unveiled the blockchain network Arc to power the next era of internet finance.
I’ve been working in crypto long enough to remember when a blockchain mainnet would launch after years of development, only for it to take several more years - if it happened at all - for an ecosystem of partners and collaborators to form around it. That’s why it’s particularly impressive to see the caliber of industry and institutional supporters Arc is debuting with.
Those include BlackRock, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation, Visa, Global Payments Inc., Commerzbank AG, HSBC, Societe Generale, Centrifuge, Securitize, USD.AI, Payward, BVNK, MoonPay, Wirex, and many more.
“From day one, Arc launches as a full-stack platform. At the base is an open Layer-1 network with institutional validators, USDC as native gas, and interoperability with 20+ blockchains through Circle CCTP and Gateway. On top of it: developer tooling, Circle Agent Stack for policy-controlled agent wallets, local fiat stablecoins, tokenized funds, and programmable wrapped bitcoin. Because these pieces already work together, anything built on Arc inherits the whole stack: assets that are already liquid, markets that are already open, costs that don’t move, and settlement that’s final in under a second.”
Beyond its stellar roster of backers, Arc stands out for several other reasons:
By using USDC as its gas token, Arc brings unprecedented predictability and simplicity to transaction fees.
It launches with quantum-resistant features and has a well-defined game plan for short-, mid-, and long-term full-stack quantum resistance.
It features Arc Studio - an onchain coding agent to help builders create applications with natural language.
It integrates deeply with Circle Agent Stack - Circle’s chain- and protocol-agnostic agentic economy infrastructure.
Circle Agent Stack was released in May with five core components that provide agents with controlled access to USDC, enabling them to hold funds, discover services, and transact programmatically across ecosystems. They are:
Agent Wallets gives agents the ability to initiate operations and to move and hold USDC under human-designed policy
Agent Marketplace empowers both humans and agents to discover, evaluate, and integrate agentic services. It is now available through a single public endpoint that shows all x402-compatible services that accept USDC across many chains.
Circle CLI serves as the control panel.
Nanopayments make small-value, high-frequency transactions both possible and economically viable.
“Nanopayments makes autonomous machine-to-machine (M2M) transactions economical at scale with gas-free transfers as small as $0.000001.”
Taken together, these strengths position Arc to become a natural home for the emerging agentic economy.
“An agent hiring three other agents, paying them in under a second, and earning a fraction of a cent for its own work is no longer science fiction. It’s possible on Arc today. Early services using Agent Stack to bring agents to Arc include: Alethieum, Architect, Arrays, BlockRun.AI, Goldsky, Kite, Ornn, Orthogonal (YC W26), and Virtuals Protocol.”
Why Does Circle Need A Blockchain?
According to TRM Labs, Circle’s stablecoin USDC is the undisputed leader in agentic payments - it has facilitated 99.6% of the total value settled via x402 since May 2025 and 98.6% of the entire AI payments volume. So why would Circle devote so many resources to building an entire blockchain network from the ground up?
At first glance, I can distinguish three key reasons. First, there is significant profit to be made from operating a blockchain and collecting transaction fees - revenue that Circle can capture itself rather than leave to Ethereum, Base, Solana, and other networks. Second, it is far easier for both humans and agents to switch the currency they pay with than to switch the underlying payment rails used by them and their counterparties. USDC’s dominance in agentic payments therefore gives Circle a powerful starting point from which to drive adoption of its own infrastructure. Third, the rise of real-world asset tokenization, combined with the significant institutional support Circle is leveraging, could open up substantial new opportunities and revenue streams for the company.
Can Arc Handle What’s Coming Next?
It’s important to note that there is currently a significant disconnect between the scale experts project for the agent economy and its size today.
While McKinsey & Company envisions $3 trillion to $5trillion in global agentic commerce by 2030, and some estimates suggests that AI consumer spending could hit $944 billion this year, the actual commerce mediated through x402 - the most widely used agentic payment protocol, since May 2025 amounts to only $25.6 million. Moreover, only between 0.6% and 7.5% of it appears to be agentic.
Yet, if even the more optimistic projections materialize, the relatively small value of individual agentic transactions would require blockchains to process an enormous volume of transactions per second (TPS) - an area where blockchain networks have historically faced significant scalability constraints.
“Agentic-compatible bandwidth isn’t a new concern, with some forecasts of agentic AI demand eventually requiring networks that can handle up to one billion transactions per second (TPS).”
AVAT CEO Bart Smith has voiced the same concern:
At its debut, Arc is processing over 3,000 TPS, with ambitions to push this to 100,000 TPS at some point in the future.
That capacity puts the challenge into perspective. Even Arc’s ambitious 100,000-TPS target would fall far short of the one-billion-TPS scenarios some forecasts envision. At the same time, the enormous gap between today’s actual agentic payment volumes and the hype for the coming years raises a different question: could the industry be building infrastructure for a level of demand that ultimately takes much longer to materialize, or never materializes at the projected scale?
Jeremy Allaire on Arc and The Future of Agentic Economy
Ahead of the launch of the “Android operating system for the global economy,” Circle’s CEO Jeremy Allaire spoke with TIME and discussed programmable money, regulation, and the future of AI. He reconfirmed that Arc’s unique features, like fees paid in dollars, settlement that is final in under a second, confidentiality with compliance built in, and operators that regulators can trust, were chosen specifically to meet the standards of banks and traditional financial institutions.
Even 13 years after founding the stablecoin issuer, Allaire still considers Circle to be in the early stages of what it could be.
“When I founded the company, I was thinking about it over a multi-decade timeframe, and we’re broadly a decade into this, and the first thing that we wanted to achieve was this idea of programmable money, open protocols for dollar digital currency on the internet, and getting that into a place where it could scale. It took around 10 years or so to get there. We’re now there, but the adoption of that is still at the very start. So there’s $360 billion of stablecoin money in circulation. There’s a lot of transaction volume, but if you look at the total supply of electronic money in the world, roughly $120 trillion of electronic money in the world, there’s an enormous amount of growth to happen, and I believe that this kind of money is a superior form of money and will eat into the electronic money base over time. It’s at the front end of penetrating all these different areas of markets and commerce and the financial system.”
What’s more, to a large extent, he sees AI as the engine behind Circle’s next decade of growth and expansion.
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