Circle, the company behind the USDC stablecoin, has announced the acquisition of Malachite, a consensus engine created by Informal Systems. The deal includes Malachite’s technology, its intellectual property rights, and the transfer of nine employees from Informal Systems to Circle’s workforce.
This acquisition comes at a time when Circle is advancing its plans to launch Arc, its own layer-1 blockchain network designed to streamline stablecoin payments. The decision reflects Circle’s strategic aim of securing greater control over its technological foundation instead of depending on third-party blockchain platforms.
Malachite, which is based on the Tendermint consensus algorithm, will continue to remain open source under the Apache 2.0 license. Informal Systems confirmed it will still support Malachite for use in other projects while concentrating on broader initiatives in distributed systems and cross-chain interoperability tools.
Industry Trend Toward Proprietary Infrastructure
Observers noted that Circle’s move fits into a broader industry trend where blockchain companies pursue ownership of critical infrastructure as they scale. Rather than building exclusively on existing platforms, firms increasingly prefer acquiring technology assets that give them control over performance, costs, and future innovation.
A similar path was seen in 2018 when Stellar acquired Chain, a blockchain startup that had raised $44 million and was providing services to enterprise clients such as Citigroup, Nasdaq, and Visa. Stellar absorbed the technology to strengthen its network rather than allowing Chain to continue operating as a stand-alone enterprise software provider.
Industry analysts indicated that the motivation behind such moves lies in the competitive advantage of managing the underlying infrastructure directly. By securing in-house consensus technology, Circle is setting up Arc to avoid reliance on external networks, ensuring it captures more value as the stablecoin market expands.
Growth of the Stablecoin Market
The backdrop for Circle’s acquisition is the rapid growth of the stablecoin sector. From August 2024 to March 2025, the market capitalization of stablecoins grew from more than $160 billion to over $215 billion. Projections suggest the sector could reach anywhere between $1.6 trillion and $3.7 trillion by the year 2030.
Stablecoin adoption has already begun outpacing traditional financial networks. In 2024, stablecoin transfer volumes exceeded the combined volumes of Visa and Mastercard, emphasizing their growing importance in global payments.
Circle’s USDC has been a direct beneficiary of this momentum. In March 2025, USDC posted record trading volumes of $219 billion. At the same time, its closest competitor, Tether, recorded a sharp decline in volumes, falling by nearly 50% between November 2024 and April 2025.
Circle’s Positioning with Arc
By acquiring Malachite’s consensus engine and integrating a dedicated team of developers, Circle strengthens the technical foundation of its Arc blockchain. This move is expected to reduce its dependence on existing blockchain platforms, lower transaction-related costs, and increase margins as payment volumes continue to rise.
Industry experts have highlighted that Circle’s decision to build its own blockchain infrastructure underscores its long-term ambition to capture more of the value chain in the growing stablecoin economy. As stablecoins become central to digital payments, controlling the core technology positions Circle to play a stronger role in shaping the market’s future direction.
