Circle, the second stablecoin transmitter in the world, would examine reversible transactions to help recover funds in the event of fraud and hacking, which seems to be contrary to one of the founding principles of the crypto: that transactions are definitively and out of centralized control.
The president of Circle, Heath Tarbert, told Financial Times Thursday that the company examined mechanisms which could allow transactions to be fell in the event of fraud or hacking, while maintaining the purpose of the regulations.
“We are thinking about (…) whether or not there is the possibility of reversibility of transactions, on the right, but at the same time, we want the purpose of the regulations,” Tarbert at FT told. “There is therefore an inherent tension between being able to transfer something immediately, but having it irrevocable (…).”
Clash with the ethics of the crypto
Supporters of reversibility argue that he could help defraud the victims and strengthen the dominant confidence in the Stablecoins. But the idea directly questions the decentralized model that underlies the crypto, where transactions are permanent and out of unilateral changes by transmitters or validators.
Cointelegraph contacted Circle for comments on the details of the reversibility of the transactions and the parameters that would be used to decide on reversals.
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Despite the risks of centralization, the reversibility of transactions proved to be useful when the decentralized Cetus scholarship was operated for more than $ 220 million in digital assets on May 22, whose validators managed to freeze $ 162 million.
A week later, the Validators SU approved a governance proposal to make the $ 162 million frozen in Cetus.
While some defenders of decentralization have criticized the ability of validators to freeze funds, other industry observers have greeted the rapid response as a step forward against the growing hacks of the cryptographic industry.
Borrow from traditional finance
Although the blockchain industry is often presented as the future of finance, it can benefit from the adoption of certain characteristics of the traditional finance industry (tradfi), according to Tarbert.
“People say that blockchain technology, stablecoins, smart contracts, is higher than technology to the current system.”
But there are certain advantages of the current system which are not necessarily present, “he said, adding that some developers saw the need for” a certain degree of reversibility for fraud “, provided that all parties agree.
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The comments come in the middle of a wider thrust in institutional quality infrastructure per circle.
In early August, Circle announced the launch of its layer 1 blockchain (L1), ARC, a new network designed to offer a “business quality foundation” for payment payments for stables, currencies and applications on the capital markets.
ARC will take advantage of the Circle USDC (USDC) as a native gas token for blockchain transactions.
Circle plans to deploy ARC as a public test this fall, before a complete launch by the end of 2025, after having integrated into the custody and the tokenization of the digital assets of Fireblocks for its solutions for supporting and compliance support, Cointelegraph reported on August 18.
The beginnings of arc with fiery objects will give banks and asset managers access to the blockchain from the first day, because Fireblocks serves more than 2,400 banks.
https://www.youtube.com/watch?v=ndkoqwegfg
Review: The crypto wanted to reverse the banks, now it becomes in the fight of Stablecoin