Circle Introduces Reversible USDC Payments on Arc Blockchain
Stablecoin leader Circle is exploring a new feature for its USDC on the Arc blockchain. This feature allows certain payments to be reversed in cases of fraud or disputes. The aim is to blend the speed of blockchain with the protections of conventional banking.
Circle’s president, Heath Tarbert, discussed this with the Financial Times. He explained that they’re thinking about whether transactions can be reversed, but we also want settlement finality,” saeid Tarbert.
Circle’s arc blockchain is designed for banks and institutions. It allows them to settle USDC transactions quickly while maintaining privacy. The Refund protocol, a smart contract tool, helps manage disputes by holding payments in escrow until an arbiter resolves the issue.
Tho, some experts, like cybersecurity specialist Lukasz Olejnik, argue that this approach addresses problems inherent in the blockchain system. They believe it mirrors traditional banking practices.
Circle’s move aligns with new U.S. regulations that treat stablecoin issuers like banks. these rules require the ability to block, freeze, or comply with court orders. Thus, reversible payments and dispute resolution mechanisms become essential.
Other financial institutions are also advancing in this space. Nine major European banks plan to launch a euro stablecoin company in Amsterdam by 2026. Paxos, another stablecoin issuer, offers custody and compliance services for corporate clients, such as PayPal, with its PYUSD stablecoin.
Circle’s Arc blockchain and Refund Protocol aim to bridge the gap between traditional finance and crypto. They provide the speed of blockchain with the security and control of traditional banking systems.
