Overview

• Circle president Heath Tarbert told the Financial Times the firm is evaluating whether USDC transfers could be reversed in limited cases such as fraud or disputes.
• Engineers are studying a refund-style counter-payment layer that would issue credits off-chain rather than unwind finalized on-chain transactions.
• Circle has not committed to implementing reversals as it advances Arc, its institutional network expected to enter public testing with USDC as the native fee token.
• Crypto community figures criticized the idea as a centralizing step that could weaken DeFi assurances and offer little relief once stolen funds are swapped or bridged.
• Circle and other issuers can already freeze or blacklist addresses, illustrated by Circle’s $58 million USDC freeze tied to a Solana scandal and Sui’s community-approved fund freezes after the Cetus exploit.