Circle Internet, (CRCL) is examining ways of reversing transactions involving its stablecoin, USDC, the Financial Times (FT) reported on Thursday.
The issuer of the second-largest stablecoin is "thinking through ... whether or not there's the possibility of reversibility of transactions," the company's president, Heath Tarbert, said in an interview with the newspaper.
Stablecoins, tokens pegged to the value of a traditional financial (TradFi) asset such as a fiat currency, are an important cog in the cryptocurrency machine, offering users a hedge against the volatility than can hit tokens like bitcoin (BTC) and ether (ETH). They're also finding popularity as a method for international payments. The sector has a market cap of about $300 billion, according to data tracked by CoinGecko. USDC alone has a market cap of $74 billion; market leader Tether's USDT has $173 billion.
Tarbert said that allowing transactions to be refunded in case of fraud or disputes, similar to what is possible in TradFi, would help push stablecoins into the mainstream.
Such a development may rub certain crypto purists up the wrong way, because they consider settlement finality to be non-negotiable. Introducing the possibility of reversing transactions could rely on the the arbitration of a central authority, which many believe is antithesis of the decentralization that lies at cryptocurrency's core.
"At the same time, we want settlement finality," Tarbert said. “So there’s an inherent tension there between being able to transfer something immediately, but having it be irrevocable.”
Circle has been at the forefront of growing adoption of stablecoins in the U.S. this year following its successful initial public offering (IPO) in June.
The company did not immediately respond to CoinDesk's request for further comment.
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