Securities lending rarely makes headlines, but Circle executive Kris Gower is making the case that the company's Arc blockchain and USDC stablecoin could reduce settlement failures and costs in the sector. Gower spoke on the BitGo podcast, which aired around November 4-5, 2026, according to Crypto Briefing.
In securities lending, one institution lends stocks or bonds to another, and the borrower posts collateral, often cash or other securities. Collateral and securities must change hands in a coordinated way. When one leg arrives late or not at all, the trade fails, and capital tends to sit idle while the system catches up.
How Arc and USDC target settlement frictions
Gower's pitch centered on settling trades in under a second, around the clock, to reduce failures. Circle positions Arc as a venue where institutions can post tokenized collateral against USDC. According to Circle, settlement on Arc happens in under a second, and the network runs 24/7, which the company frames as removing traditional settlement cutoffs that govern when institutions can move money and collateral.
Circle's materials also pitch Arc and USDC for tokenized repurchase agreements, or repo, and for collateral mobility more broadly. Repo is a close cousin of securities lending: one party sells securities and agrees to buy them back later, functioning like a short-term secured loan. Circle says it is promoting instant repo settlement for a range of financial institutions and frames this as a way to lean less on conventional settlement systems like Fedwire, the Federal Reserve's payment network.
Arc's short track record
Arc is a young network. Its public mainnet launched on September 16, 2026, with USDC integrated from the start. Circle says the chain had over 100 institutional partners on day one, including a collaboration with the Depository Trust & Clearing Corporation (DTCC) aimed at advancing the tokenization of securities.
The network also has a native token, ARC, minted by Circle. ARC has a total supply of 10 billion, and Circle intends to use it for future proof-of-stake security and governance on the Arc network. Meanwhile, USDC circulation reached approximately $74 billion as of late October 2026, and on-chain activity has picked up on the newly launched Arc platform.
Why the settlement angle matters
Securities lending and repo are where large institutions move collateral to fund positions and manage liquidity. Settlement failures carry real costs: they tie up capital, create operational headaches, and force firms to keep buffers against things going wrong. Traditional systems also close, and when they do, collateral that could be working sits still until the next window opens. A network that runs 24/7 lets institutions move collateral when they need to, not when the clock allows.
What this means for Circle and its rivals
For Circle, Arc marks a strategic step beyond issuing a stablecoin. The company is trying to own the rails as well as the asset that moves across them. But Arc launched only in September 2026, so its track record under stress is short. Institutional partnerships at launch are a promising signal, but live settlement volume is the real test.
The ARC token is another open question. With 10 billion tokens and a planned role in network security and governance, how Circle distributes and decentralizes that supply will shape how independent Arc actually becomes from its creator.
Three things are worth tracking. First, whether the DTCC collaboration produces live tokenized securities on Arc. Second, whether repo and securities lending activity on the chain moves beyond pilots. Third, how USDC circulation develops from its approximately $74 billion level as Arc matures.
