circle Introduces Reversible USDC payments on Arc Blockchain
Stablecoin leader Circle is exploring a new way to handle USDC payments on its Arc blockchain. The idea is to allow some transactions to be reversed in cases of fraud or disputes. This move aims to give institutions the flexibility they need while maintaining the speed of blockchain technology.
Heath Tarbert, Circle’s president, explained the concept to the Financial Times. He said the company is considering whether transactions can be reversed while still ensuring settlement finality. This balance is crucial for fast and secure payments.
Circle has already introduced a “Refund Protocol.” This smart contract tool holds payments in escrow and allows refunds when all parties agree. It’s like having a mediator to handle disputes on the blockchain.
Arc,Circle’s layer-1 blockchain,is designed for banks and financial institutions. It lets them settle USDC transactions quickly while adding privacy features. Tarbert noted that while blockchain tech is advanced, conventional finance has its advantages too.
some critics argue that Circle is solving problems it created. Cybersecurity expert Lukasz Olejnik shared this view on X. he believes the blockchain sector is rediscovering why traditional banking systems work the way they do.
Other financial players are also making moves. Nine European banks plan to launch a euro stablecoin company in amsterdam. This is expected to roll out in 2026.
Circle’s legal move also aligns with new U.S. rules. These rules treat some stablecoin issuers like banks, requiring them to block or freeze transactions if needed. This makes reversible payments and dispute resolution necessary.
Circle is combining Arc with tools like Refund Protocol. This setup lets counterparties program refunds or mediations.Early integrations with Arc include blockchain infrastructure providers like Fireblocks. the first users will likely be trading desks and treasury teams, not retail wallets.
