Informal Systems Announces Malachite Acquisition by Circle to Power New Arc Blockchain Network

Rhea-AI Summary

Circle (NYSE:CRCL) has acquired Malachite, a high-performance Byzantine Fault Tolerant (BFT) consensus engine, from Informal Systems to power its new Layer-1 blockchain network, Arc. The acquisition will support Circle's development of a purpose-built blockchain for stablecoin finance, with testnet launch expected later in 2025.

Malachite, which implements the Tendermint algorithm with a focus on correctness and efficiency, will remain open source under the Apache 2.0 license. Several Informal Systems team members will transition to Circle to support Arc's development, while Informal Systems continues to advance other projects and maintain industry collaborations.

Positive

• Strategic acquisition strengthens Circle's blockchain infrastructure for stablecoin payments
• Malachite will remain open source, ensuring continued industry access and innovation
• Key team members from Informal Systems joining Circle to support development
• Technology validation from a major financial technology company

Negative

• Potential brain drain from Informal Systems as team members transition to Circle
• Integration and development risks associated with new blockchain platform launch

News Market Reaction

-5.15%

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-5.15% News Effect

On the day this news was published, CRCL declined 5.15%, reflecting a notable negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

High-performance BFT consensus engine powers Circle's new stablecoin-focused Layer-1 blockchain launching in testnet later this year.

TORONTO, Aug. 18, 2025 /PRNewswire/ -- Informal Systems, a leader in blockchain infrastructure and protocol design, announced on August 12 that its high-performance consensus engine, Malachite, has been acquired by Circle Internet Group, Inc. (NYSE: CRCL) (Circle), a global financial technology firm, to support the launch of Arc¹, a new open Layer-1 blockchain network purpose-built for stablecoin finance. Arc is expected to debut in testnet later this year.

Founded by experts in formal methods and distributed systems, Informal Systems builds transformative technologies to foster trust in software and money. Malachite is the product of years of pioneering work in consensus and verifiability—a Byzantine Fault Tolerant (BFT) consensus engine implementing the Tendermint algorithm in a modular design focused on correctness and efficiency. Originally developed to meet real-world demands for a flexible, reusable foundation for decentralized systems.

Circle's integration of Malachite will help bring greater performance, reliability, and security to stablecoin-based payments, reinforcing Malachite's mission to deliver trustworthy, low-cost, and borderless financial infrastructure. The Malachite repository will remain open source under the Apache 2.0 license, ensuring continued industry access and innovation.

"This acquisition is a strong validation of Malachite and of our incubation model," said Ethan Buchman, CEO at Informal Systems. "Circle's adoption of Malachite provides a high-impact use case, a robust financial foundation for future development, and ensures our technology contributes to meaningful, mission-aligned outcomes."

The acquisition aligns with Informal's broader strategy of spinning out incubated projects to accelerate their growth. Alongside Malachite, Informal is advancing initiatives such as Cycles, Hydro, and Quint, a leading tool for complex distributed systems that supported Malachite's development. Several Informal team members will join Circle to drive Arc's development, while Informal continues to support other Malachite use cases and collaborate with industry partners on next-generation blockchain applications.

"We're proud of the exceptional talent and technical depth nurtured at Informal," said Arianne Flemming, COO. "This transition reflects our commitment to ensuring that the technologies we create serve the most transformative purposes possible."

Informal will continue working with leading teams on protocol design and cross-chain infrastructure, offering engineering and security expertise to organizations building with Malachite and beyond. For collaboration inquiries, contact hello@informal.systems.

¹ Arc is offered by Circle Technology Services, LLC ("CTS"). CTS is a software provider and does not provide regulated financial or advisory services. You are solely responsible for services you provide to users, including obtaining any necessary licenses or approvals and otherwise complying with applicable laws.

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SOURCE Informal Systems

FAQ

What is Circle (NYSE:CRCL) acquiring from Informal Systems?

Circle is acquiring Malachite, a high-performance Byzantine Fault Tolerant (BFT) consensus engine that implements the Tendermint algorithm, to power its new Arc blockchain network.

When will Circle's Arc blockchain network launch?

Circle's Arc blockchain network is expected to launch in testnet later in 2025.

Will Malachite remain open source after Circle's acquisition?

Yes, Malachite will remain open source under the Apache 2.0 license, ensuring continued industry access and innovation.

What is the purpose of Circle's new Arc blockchain?

Arc is a new Layer-1 blockchain network specifically designed for stablecoin finance, aimed at bringing greater performance, reliability, and security to stablecoin-based payments.

How will this acquisition affect Informal Systems' team?

Several team members from Informal Systems will transition to Circle to drive Arc's development, while Informal continues to support other projects and maintain industry collaborations.