USDC issuer Circle has launched the mainnet of Arc, a layer-1 (L1) blockchain targeting stablecoin payments and financial markets, particularly agentic transactions.

Arc uses USDC as its native gas asset and offers Ethereum Virtual Machine (EVM) compatibility and deterministic sub-second settlement finality, according to an Arc blog post on Wednesday.

The network supports more than 20 fiat stablecoins, including USDC, EURC, JPYC, KRW1 and TRYB, while tokenized assets including BlackRock’s BUIDL and Circle’s USYC are available natively on Arc. Arc also offers interoperability with more than 20 blockchains through Circle’s Cross-Chain Transfer Protocol (CCTP) and Gateway.

CEO Jeremy Allaire called Arc “the single most significant launch in Circle’s history since USDC itself.”  Separately, Circle said in a post on X that Arc was built for “programmable money, global markets, and agentic economic activity,” describing the network as stablecoin-native infrastructure for developers and institutions.

The launch follows Arc’s public testnet debut in October 2025, when Circle said more than 100 companies were participating, including BlackRock, Goldman Sachs, Mastercard and Visa.

Circle said in August that more than 100 institutional and ecosystem builders had participated in Arc’s private mainnet ahead of the public launch.

Arc said it ultimately plans to broaden participation in network operations and explore a transition from Proof of Authority to Proof of Stake in 2027. Circle also completed the genesis mint of 10 billion ARC tokens this week but said the mint does not represent a commitment to launch the token publicly.

Related: Crypto stocks slide after CLARITY Act fails to advance in Senate

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The US dollar is consolidating against the yen and Canadian dollar ahead of the key event of the week — the Federal Reserve meeting. The Fed is widely expected to raise its policy rate by 25 basis points to a range of 3.75–4.00%. As this move is already largely priced in, attention will focus on the updated economic projections, dot plot and press conference. Investors will assess whether the September rate hike marks the beginning of a new phase of monetary tightening or whether the central bank will prefer to adopt a wait-and-see approach.

Expectations of a more hawkish Fed are supported by persistent inflationary pressures, recent employment data and rising oil prices. US retail sales data will provide an additional reference point ahead of the meeting. Strong figures could provide further support for the dollar, although the market reaction is likely to remain limited ahead of the Fed decision.

USD/JPY

The decline in USD/JPY over the past two weeks has slowed around the key support area of 152.90–153.20. At the start of the week, the price tested this area several times, while buyers managed to establish a foothold above the psychological 155.00 level yesterday. Hawkish Fed rhetoric could support a corrective rise in USD/JPY towards 156.20–157.00. More cautious signals regarding further policy tightening, by contrast, could put renewed pressure on the dollar and lead to another test of the 152.90–153.20 area.

Key events for USD/JPY:

• today at 15:30 (GMT+3): US core retail sales;
• today at 21:00 (GMT+3): US Federal Reserve interest rate decision;
• today at 21:30 (GMT+3): Federal Open Market Committee press conference.

USD/CAD

USD/CAD has recovered from its recent lows and is testing the 1.3895–1.3940 resistance area, despite support for the Canadian dollar from elevated oil prices. A firm move above 1.3940, followed by the level turning into support, could pave the way for a rise towards 1.4000–1.4030. A failed attempt to establish itself above the current resistance area, by contrast, could trigger a renewed decline towards the 1.3760 support level.

Key events for USD/CAD:

• today at 15:30 (GMT+3): Canadian building permits;
• today at 17:30 (GMT+3): US crude oil inventories;
• today at 18:30 (GMT+3): Federal Reserve Bank of Atlanta GDPNow indicator.

Overall, USD/JPY and USD/CAD remain in consolidation ahead of the key Fed decision. As a 25-basis-point rate hike is already largely priced in, the dollar’s subsequent reaction will depend primarily on the central bank’s projections and rhetoric. Signals pointing to further tightening could support gains in both pairs, while a more cautious Fed stance could put renewed pressure on the US currency.

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Two central banks are heading in genuinely opposite directions this week, and the tension is unmistakable. The Bank of Canada held rates steady at 2.25% on September 2, with a mildly hawkish tilt as policymakers acknowledged a broadening economic recovery alongside rising inflation risks. Since then, Canadian data has stayed firm, August CPI held at 3.0% year-on-year, and elevated oil prices, boosted by Middle East tensions, continue to provide the loonie with structural support given Canada’s status as a major crude exporter.

The yen, meanwhile, is the real story of the week. The Bank of Japan is widely expected to hike its policy rate to 1.25% on Friday, its highest level since April 1995, after Treasury Secretary Scott Bessent’s public pressure campaign pushed markets to price in an 80% probability of the move. The yen has already surged to seven-month highs in anticipation, with August export data beating forecasts on strong AI-chip demand, even as Bloomberg warns the scale of tightening now expected risks disrupting markets should the BOJ fail to deliver.

The result: a resilient, oil-backed loonie facing off against a yen riding its most significant policy shift in three decades, leaving CAD/JPY’s next move to hinge almost entirely on Friday’s BOJ decision.

Technical Analysis of CAD/JPY

As the CAD/JPY daily chart shows, the pair has broken below its long-term ascending trendline from last November’s lows, with price now trading well below the 100-period EMA at 114.02, inside the 110.50–112.00 support zone that has held since early August. The descending trendline from May’s highs near 117.50 now sits below current price, positioning it as a potential support level should the pair extend lower.

Bullish Scenario

Should buyers defend the 110.50–111.00 support and stage a recovery, the first real test becomes the 112.00–112.50 resistance zone, with a stronger push potentially reaching the 113.50–113.75 area, where the broken long-term ascending trendline and the 100-period EMA converge.

Bearish Scenario

Conversely, a break below the 110.50–111.00 support would bring the descending trendline from May’s highs into play as a possible support level, with a confirmed break below that also exposing the 108.00–108.50 zone, the level that anchored the entire late-2025 recovery.

With price trading beneath both its EMA and its former long-term uptrend, and the old descending trendline now positioned as potential support below, CAD/JPY’s next move looks set to hinge on Friday’s BOJ decision. Will the yen’s historic tightening push the pair into fresh multi-month lows, or does support finally hold?

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With those correlations weaker, protective positions that worked recently, notably hedging bitcoin against S&P 500 index futures on the assumption it would keep tracking risk assets, are less reliable for now. (If bitcoin usually tracks U.S. stocks, a long-bitcoin book can be faded, or hedged, by shorting the index futures.)

“That means the beta hedge that would have worked Monday is unreliable today, and today’s FOMC reaction may be swamped by regulatory follow-through,” Liu said.

That sets up the decision, due at 2 p.m. ET, as a test of whether bitcoin re-establishes the relationship with the dollar and stock market or keeps trading off regulatory news.

The Fed is widely expected to raise interest rates by 25 basis points. That move is largely priced in, and most investment banks are still forecasting additional hikes by year-end.

Unless Chair Kevin Warsh delivers a larger increase or unexpectedly hawkish guidance, some observers say the Dollar Index could slide. A weaker dollar would, in isolation, be a tailwind for bitcoin.

Traders should also watch Treasury yields. A sharp rise in yield volatility can tighten financial conditions and revive risk-off flows across crypto.

“The market lull can easily be attributed to expectations of signals from the Fed later on Wednesday, which have greater potential to influence volatility than the 25-basis-point rate hike already priced in,” Alex Kuptsikevich, the chief market analyst at The FxPro, said in an email. Stay alert!

Digital asset financial services firm Two Prime unveiled a bitcoin lending vault on Pareto, targeting annual yields of 1.5% to 2% by lending to institutional borrowers.

The Axiom WBTC Yield Vault accepts wrapped bitcoin (WBTC), a token representing bitcoin that can be used on other blockchain networks.

The vault requires a minimum deposit of $250,000 in WBTC and has an initial capacity of 1,350 BTC ($104 million). Returns are subject to market conditions and are not guaranteed.

Two Prime is expanding its lending business into onchain finance, connecting bitcoin holders seeking income with institutions seeking access to bitcoin funding.

The firm, which provides institutional investment strategies and bitcoin-backed lending, has committed roughly $10 million of its own capital to absorb initial losses. The strategy targets borrowers including public companies, credit-rated entities and diversified financial institutions.

Pareto supplies the blockchain-based private credit infrastructure underpinning the vault. ICE Digital Trust and Copper Technologies will hold its assets in custody.

Read More: Ditching bonds for bitcoin: How crypto can tackle the AI-heavy portfolio dilemma

Germany’s largest bank, Deutsche Bank, is awaiting regulatory approval to launch digital asset custody solutions for institutional clients and corporations in Europe. 

Deutsche Bank plans to go live with the offering for its first clients this year, subject to completion of the applicable regulatory timeline, the bank announced on Wednesday.

The bank plans to offer initial support for Bitcoin (BTC), Ether (ETH) and select stablecoins, including Circle USDC (USDC), EURC (EURC) and AllUnity EUR (EURAU). It also plans to include support for tokenized financial instruments at a later point.

Deutsche Bank is one of the institutions listed by the Financial Stability Board as a Global Systemically Important Bank,

The development marks the German institution’s latest push into crypto, confirming earlier reports that it was developing crypto custody services. In June, Deutsche Bank’s head of digital assets, Sabih Behzad, revealed that the bank was considering entering the stablecoin market, including issuing its own token. 

The bank expects to receive the license for the custody offering in October, under the EU’s Markets in Crypto Assets (MiCA) framework, Heinrich Frömsdorf, a spokesperson for Deutsche Bank, told Cointelegraph. 

German banks ink partnerships to pursue crypto services

The push to pursue crypto services is expected to accelerate after MiCA reached full enforcement on July 1.

Deutsche Bank first revealed plans to launch crypto custody solutions in 2023, as part of a partnership with Taurus, soon after applying for a digital asset custody license in Germany. 

Other German banks are also offering similar solutions. In April 2024, Germany’s largest federal bank, the Landesbank Baden-Württemberg, started offering crypto custody solutions after partnering with the Austria-based Bitpanda for its institutional custody platform.

In December 2025, DZ Bank said it received authorization from German regulator BaFin under MiCA to operate its meinKrypto platform.

Related: USDT payments feature in Polish energy giant’s failed $230M oil deal: FT

Bitcoin (BTC) and the broader crypto market fell sharply after the Senate failed to pass the CLARITY Act. Senators voted 49-50 on a key procedural vote, short of the 60 votes required for the legislation to pass.

The market reacted quickly, with BTC dropping over 3% to a low of $74,887 on Tuesday before ultimately closing at $75,584. Ethereum (ETH) recorded a bigger decline, falling nearly 5% to a low of $2,356 before closing at $2,396. Ripple (XRP) fell over 8% in 24 hours and currently trades around $1.30. Other tokens registered similar declines, with the overall crypto market cap down 2.31%.

Clarity Act Fails to Advance

The Senate’s failure to pass the crucial legislation to a cloture vote keeps the market structure bill in limbo. The CLARITY Act would have laid out a clear regulatory framework by dividing oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Several Senators across party lines withheld support for the legislation in its current form. Democratic Senators Angela Alsobrooks, Ruben Gallego, and Kirsten Gillibrand voted “No,” with several Republican Senators, including Susan Collins, Josh Hawley, Jerry Moran, and Thom Tillis, also voting against passing the legislation.

Tillis, who has previously worked on disagreements over stablecoin rewards and ethics, voted “No” and moved to recommit. This leaves the door open for another attempt to secure bipartisan support for the legislation.

Late Democratic Counteroffer

Democratic lawmakers introduced an amended version of the CLARITY Act hours before the scheduled vote. The counter addressed several ethics provisions and other provisions, and was submitted after discussions with Senate Minority Leader Chuck Schumer’s office. However, the counter was rejected by Republican lawmakers, who argued that the current version already included 126 changes requested by Democratic lawmakers.

Ethics Rules Remain Major Roadblock

Ethics concerns and disagreements remain the biggest hindrance to the bill despite President Trump accepting an amended version. The revised language put several restrictions on crypto interests and holdings held by the President, Vice President, members of Congress, federal judges, and relatives of government officials. It also allowed state Attorney Generals to pursue civil enforcement actions.

However, Democratic lawmakers argued the restrictions did not address crypto ventures linked to President Trump and his immediate family. The Democrats’ revised bill wanted to extend the rules to the children of federal officials as well. Senator Gallego accused President Trump of seeking “time to crime” and ruled out supporting the legislation in its current form.

Other provisions lawmakers failed to agree upon are stablecoin rewards, protection for developers, and event contracts that could conflict with existing state or tribal gambling rules. The banking industry has pushed back against stablecoin rewards, flagging concerns it could impact deposits in traditional financial institutions.

According to Lacie Zhang, research analyst at BitGet Wallet, markets had only partially priced in the Senate passing the CLARITY Act.

“The CLARITY Act appears to be only partially priced in. Prediction markets still imply a relatively low probability of enactment in 2026, suggesting the market is not positioned for certain passage.”

Zhang added that BTC faces far less regulatory uncertainty thanks to spot Bitcoin ETFs, which give investors regulated exposure to the asset. BTC’s custody and institutional trading systems are also more established.

“Bitcoin would likely benefit the least on a relative basis because its regulatory status, ETF access and institutional infrastructure are already comparatively clear.”

According to Zhang, Ethereum stood to benefit most if the regulation passed, given the network supports stablecoins, decentralized finance (DeFi), and tokenized assets, and faced substantial regulatory complications.

Institutions to Keep Building Under Existing Rules

Meanwhile, crypto companies and financial institutions in the industry are expected to continue building products despite the setback. However, the absence of a clear regulatory framework and legislation could hinder firms expanding their services. Jessica Martinez, policy director at Fireblocks, stated to crypto.news,

“The good news is that the market will keep moving whether Clarity passes or not. So the question becomes which entities are prepared to move with it.”

Major players in the cryptocurrency industry are already operating under current rules, while more cautious players are content with waiting things out.

Bitcoin and Crypto Take Hit

The failure to pass the CLARITY Act has had a tangible impact on the market. Data from CoinGlass revealed $668 million in total liquidations over the past 24 hours, of which $570 million were long positions, a clear sell-side tilt. Meanwhile, CoinMarketCap’s Fear & Greed Index slipped to 63, a notable decline from 71 recorded the week prior. The total crypto market cap has also slipped over 2% to $2.58 trillion.

BTC also retreated following the vote, dropping over 3% to $75,584 on Tuesday. The flagship cryptocurrency is currently trading around $75,669, maintaining a constructive bias. The price is also above the 50-day EMA around $73,566, and the 200-day EMA around $73,052, reinforcing the bullish bias. However, the Relative Strength Index (RSI) has slipped back into neutral territory, while the MACD suggests waning positive momentum.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.