I'm currently using ARC to manually test my app, but am hoping to move towards automation of the testing process.
Is it possible to use ARC to automate tests, something similar to what Selenium Webdriver does for FF/Chrome?
I know it's still early in the development process but something like this would be incredibly helpful.
Yes. ARC supports the Android adb "shell instrument" command, per the Android documentation
See the Getting Started document for starting adb.
If you create an .apk for the tests that is separate from the .apk being tested, you will need to bundle both .apk files together in the .crx package. It should be straightforward to incorporate doing that and launching the tests into any build/test environment.