Circle acquires consensus engine Malachite to power Arc blockchain

Circle has acquired Malachite, a consensus engine developed by Informal Systems, to power its upcoming Arc blockchain.

The deal includes Malachite’s technology, intellectual property, and the transfer of nine Informal Systems employees to Circle.

Circle, the issuer of the USDC stablecoin valued at US$65 billion, recently revealed plans to build its own layer-1 blockchain for stablecoin payments.

Malachite is based on the Tendermint consensus algorithm and will remain open source under the Apache 2.0 license.

Informal Systems will continue supporting Malachite for other projects while focusing on distributed systems and cross-chain tools.

🔗 Source: CoinDesk

🧠 Food for thought

1️⃣ Blockchain companies increasingly acquire technology to control their own infrastructure

Circle’s acquisition of Malachite reflects a trend where blockchain companies purchase technology assets to build proprietary networks rather than relying on existing platforms.

This is similar to Stellar’s 2018 acquisition of Chain, where a blockchain startup that had raised $44 million and served enterprise clients like Citigroup, Nasdaq, and Visa was acquired to enhance Stellar’s network instead of continuing as independent enterprise software1.

The trend shows how blockchain companies focus on controlling their underlying infrastructure as they grow, particularly when targeting specific use cases like payments.

By acquiring Malachite’s consensus engine technology and bringing nine developers in-house, Circle gains the technical foundation needed for their Arc blockchain without relying on third-party consensus mechanisms.

2️⃣ Massive stablecoin market growth justifies significant infrastructure investments

Circle’s move to build its own blockchain infrastructure aligns strategically with the rapid expansion and future projections of the stablecoin market.

The stablecoin market grew from over $160 billion in August 2024 to over $215 billion by March 2025, with industry projections estimating it could reach between $1.6 trillion to $3.7 trillion by 20302 3.

Stablecoin transfer volumes have already surpassed those of Visa and Mastercard combined in 2024, highlighting their increasing role in global payments4.