Circle considers reversible transactions in USDC
Circle, the issuer of the USDC stablecoin, is considering introducing reversible transactions that would allow users to receive compensation in cases of fraud or disputes.
Circle President Heath Tarbert, former head of the CFTC, said such measures could be an important step toward integrating stablecoins into traditional finance. “There’s a tension between speed and finality of transactions. We want to preserve instant settlement while giving users a way to request refunds,” he explained.
Circle explores adding reversible transactions to stablecoins. Source: ft.com
The proposal challenges one of crypto’s core principles – the irreversibility of blockchain records. Some industry players have already criticized the idea, with venture investors calling it “offensive” that the system would still be labeled a blockchain after such a feature is added.
Circle is developing a new blockchain platform called Arc, designed for financial institutions. One of the features already in testing is “confidential transfers”: while addresses remain public, the transaction amounts are encrypted, allowing banks to hide deal details from outside observers. Arc has faced criticism for excessive centralization and for moving away from the principle of eliminating intermediaries.
Meanwhile, the stablecoin market continues to grow: more than $280 billion in digital dollars are in circulation, with USDC accounting for $74 billion. Goldman Sachs forecasts USDC could grow to $77 billion by 2027, with a CAGR of 40%.
According to Tarbert, reversible transactions could work similarly to credit cards: a separate layer where parties agree on counter-payments. Circle believes this would attract pension funds, banks, and insurers that are unwilling to enter crypto at scale without fraud protection.
In short, Circle is betting on aligning closer with “traditional finance” standards, even if that puts it at odds with crypto purists.
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