Circle is set to launch an innovative on-chain refund protocol for its Arc blockchain, aiming to tackle the pressing issues of fraud and compliance in stablecoin transactions. The upcoming Refund Protocol will facilitate escrow and arbiter-resolved refunds, providing treasury teams and banks with robust tools to handle transaction disputes entirely on-chain.
Arc, introduced in August 2025, is designed as an enterprise-grade Layer-1 blockchain tailored for stablecoin-powered payments, foreign exchange, and capital markets. This network prioritizes regulatory compliance while offering instant settlements in USDC for financial institutions.
In a strategic move to enhance its capabilities, Circle partnered with Fireblocks in early September 2025. This collaboration aims to integrate Arc with the Fireblocks Network and Circle Payments Network, ultimately accelerating the adoption of USDC among banks through compliance-first dispute resolution tools.
The launch of the refund mechanism is particularly timely, addressing the increasing demand from institutions for on-chain payment infrastructures that align with traditional banking fraud protections. As treasury teams progressively adopt stablecoin frameworks for payroll and settlement operations, the need for effective dispute resolution capabilities becomes ever more significant.
