TLDR
- Circle is exploring ways to make USDC transactions reversible to combat fraud and disputes, similar to traditional finance systems
- Circle President Heath Tarbert says reversibility could help push stablecoins into mainstream adoption
- The proposal challenges crypto’s core principle of settlement finality and may upset decentralization advocates
- USDC is the second-largest stablecoin with a $74 billion market cap, while the total stablecoin market is worth $300 billion
- Circle plans to launch its Arc blockchain by end of 2025, using USDC as the native gas token
Circle Internet is examining ways to reverse transactions involving its USDC stablecoin, according to a Financial Times report. The company’s president Heath Tarbert confirmed Circle is exploring transaction reversibility mechanisms.
The move represents a shift from traditional crypto principles where transactions are final. Settlement finality has long been considered a core feature of blockchain technology.
Tarbert explained the company faces a challenge between immediate transfers and permanent settlement. He told the Financial Times that Circle wants both quick transactions and settlement finality, creating an inherent tension.
The stablecoin market has grown to approximately $300 billion in total value. USDC holds the second position with a $74 billion market cap, trailing only Tether’s USDT at $173 billion.
Push for Mainstream Adoption
Tarbert believes reversible transactions could help stablecoins gain broader acceptance. He compared the concept to traditional finance systems where fraud disputes and refunds are standard practice.
Stablecoins serve as important stability tools in the crypto market. These tokens are pegged to traditional assets like fiat currencies, offering protection against price swings that affect Bitcoin and Ethereum.
The tokens have also gained popularity for international payments. Their stable value makes them attractive for cross-border transactions compared to volatile cryptocurrencies.
Circle has been working to expand stablecoin adoption in the United States. The company completed a successful initial public offering in June 2025.
Conflict with Crypto Values
The reversibility proposal may face resistance from crypto purists. Many supporters view permanent transactions as fundamental to blockchain technology’s decentralized nature.
Transaction reversals would likely require central authority oversight. This centralized approach conflicts with cryptocurrency’s core philosophy of decentralization and user control.
Some industry experts see benefits in borrowing features from traditional finance. Andrei Grachev from Falcon Finance argues that institutional financial systems require flexibility that pure immutability cannot provide.
Previous examples show mixed results for transaction interventions. When Cetus exchange lost over $220 million in May, Sui validators managed to freeze $162 million and later returned the funds through community governance.
Future Blockchain Plans
Circle announced plans to launch its Arc blockchain network by the end of 2025. The layer-1 blockchain will use USDC as its native gas token for transaction fees.
Arc targets enterprise applications including payments, foreign exchange, and capital markets. The network aims to provide institutional-grade infrastructure for stablecoin operations.
Circle partnered with Fireblocks for custody and compliance support on the new blockchain. Fireblocks serves over 2,400 banks, potentially giving Arc immediate institutional access upon launch.
The company plans to roll out Arc as a public testnet this fall before the full launch.
