According to the stablecoin startup, irreversible cryptocurrency transactions have resulted in significant losses for millions, making a new digital asset with more flexibility necessary.
The CEO of Circle, the company that issues USD Coin (USDC), Jeremy Allaire, announced the introduction of two new on-chain solutions designed to thwart asset theft and other illegal activities.
According to rumors, the CEO of Circle lost around $10 billion in cryptocurrency between 2021 and 2023. These losses were mostly caused by hackers and exploiters attacking decentralized protocols.
Allaire continued by saying that these assets are more difficult to seize because cryptocurrency transactions are irreversible. The lack of transaction reversibility, a crucial component of contemporary payment systems and essential in a world plagued by online fraud or customers receiving subpar goods or services, has hindered the uptake of on-chain payment methods like stablecoins for commerce.
The “Recoverable Token Standard” was released by USDC’s inventor, drawing from past Stanford University research. According to Allaire, the protocol was developed to support the foundational layer of money transmission and allow for the revocation of transfers, allowing ERC-20 tokens to be recovered.
The recommended standard for cryptocurrency issued on Ethereum is ERC-20. The concept is open-source, and the CEO of Circle invited cryptocurrency enthusiasts to examine its source code on GitHub.
Circle typically releases a whitepaper when a new blockchain product is introduced. Allaire’s company also supplied details regarding R-Pools, an insurance and liquidity mechanism for Recoverable Tokens.
The pools enable a Recoverable token holder to redeem their holdings through a crypto insurance fund, acting as a buffer for the new token model. Circle CEO Jeremy Allaire said:
“We have long held that the open and programmable nature of digital currency money on blockchain networks would spawn solutions to these problems, but ones that can be adopted for the vast array of on-chain financial and commercial use cases, not just retail payments.”
This came up in response to accusations made by Senators Sherrod Brown and Elizabeth Warren, which Allaire’s stablecoin operator vigorously refuted, that it had improper financial ties and was funding illegal activity.
According to reports, Circle is working with established financial behemoths in Japan to develop stablecoin solutions and plans to go public in 2024.
