Circle unveils Refund Protocol to add buyer protections to USDC payments
New rules for USDС
Circle, the issuer of USDC, has introduced a new smart contract platform called Refund Protocol, designed to enable refunds and dispute resolution for non-custodial stablecoin transactions.
Stablecoin payments typically function like cash transactions, where users have no recourse in case of an error. The new protocol changes this by allowing payments to be made through a smart contract that temporarily holds the funds. If a problem arises, the buyer can request a refund, and a neutral arbitrator can step in to resolve the issue.
New rules for USDС
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“Refund Protocol offers in-chain dispute resolution and refunds for USDC payments without custodial risk or centralized trust, including:- Transparent, programmable escrow
- Disputes settled by a non-custodial arbitrator
- Early fund releases with user approval,” Circle wrote.
The arbitrator can only approve a payment or refund — they cannot reroute funds elsewhere. This ensures that funds remain non-custodial, meaning no party has complete control over the transaction.
As we wrote, according to Coinbase’s monthly report for institutional investors, Bitcoin has been in bear market territory since late March, while the broader Coinbase Coin50 Index, tracking the top 50 crypto assets, has signaled a bear trend since late February.
