Circle Breaks Crypto Taboo: Prepares Reversible Transactions for USDC

Circle, the world’s second-largest issuer of stablecoins, is developing a mechanism that would allow transactions to be reversed in cases of fraud or disputes. Company president Heath Tarbert said this approach could help integrate stablecoins into the traditional financial system and make them more attractive to banks and institutional investors. 

According to the “Financial Times”

The new system, currently being tested on the Arc blockchain, would not directly unwind payments but instead enable “counter-payments,” similar to credit card refunds. This represents a sharp departure from the crypto industry’s long-held emphasis on blockchain “immutability.” While some purists view the move as heretical, Circle argues it is necessary to bring USDC into the financial mainstream.

With more than $74 billion USDC in circulation, Circle is focusing on financial institutions, funds, and corporations, positioning Arc as a platform for international transactions. Despite criticism that the system is too centralized and strays from crypto’s founding principle of bypassing intermediaries, Circle maintains that the future lies in merging blockchain innovation with traditional financial safeguards, including refund capabilities.