You paid a supplier 100 USDC, but your books may show a foreign exchange loss. The problem is not the money itself. The problem is that contracts often do not state which day's exchange rate applies when a refund is made.
The core conflict of stablecoin refunds is this: when you pay, you may use a rate of 1 USDC = 1 USD. When you get a refund, the platform may convert 100 USDC back to your local currency at that day's real-time exchange rate. If the USD/RMB rate falls from 7.25 to 7.10 during this time, the USDC you get back is worth 15 yuan less in RMB. Who bears that 15 yuan depends on what the contract and the platform specify.
Scenario: Why You Lose Money
You are a Chinese company buying from a US supplier. The contract says: the USDC amount is converted at the fixed exchange rate on the 1st of each month. On February 1, the rate is 7.25, so goods worth $1,000 are payable as 1,000 USDC. You pay 1,000 USDC, and the supplier accepts it.
In March, some goods are found to be defective, and the supplier agrees to refund 200 USDC. At this time, the USD/RMB exchange rate has fallen from 7.25 to 7.10. The supplier refunds 200 USDC. You still receive 200 USDC in your account, but if you convert that 200 USDC into RMB, you get 30 yuan less than in February. That 30-yuan difference is the exchange difference.
Who Bears the Exchange Difference?
It mainly depends on two things:
First, what the contract says. If the refund clause clearly states 'settle at the original payment exchange rate', the supplier should convert at 7.25 and refund the corresponding USDC amount — in this example, about 203.4 USDC instead of 200. If the contract does not say this, the default is usually 'refund back to the original payment method in the same currency', which means the market exchange rate on the refund date applies, and you bear the exchange loss.
Second, how the platform handles it. The common rule for mainstream cross-border payment platforms is: if a refund involves currency conversion, exchange rate movements after the original conversion can create an exchange rate difference. This difference may be a gain or a loss, and it is usually shown as a separate fee item in the wallet transaction record. Some crypto payment cards have similar rules: the refund amount may be affected by network exchange rates and the conversion mechanism in the original transaction, so the original stablecoin amount may not always be fully returned.
Correct Approach: Clarify Three Things in Advance
First, lock in the exchange rate method in the contract. Even adding one line such as 'refunds are converted at the original payment date exchange rate' can clearly shift the exchange rate risk to the supplier. If you do not want the supplier to suffer a loss, you can also agree to 'use the real-time exchange rate on the refund date'.
Second, confirm that your payment platform supports 'refund in the original currency'. Many mainstream payment platforms allow an administrator to choose 'refund in the currency you paid' in the payment settings. If you select this option, the refund amount is calculated using the original currency from the payment, and the exchange rate difference is shown as a separate fee. Not all platforms have this option, so check the settings before using it.
Third, run a small test. For the first few transactions with a supplier, run a complete flow: pay → request a refund → check how much stablecoin actually arrives. If the difference is obvious, you know this step has a pitfall, and you should go back and revise the contract.
Final Checks
When handling supplier refunds later, check three things:
Check the contract to see whether a 'refund exchange rate' clause is written. If not, add a memorandum.
Open the payment platform and confirm the refund currency setting — is it 'original currency' or 'real-time exchange rate'?
Calculate the amount: if the refund date's exchange rate is used, how much exchange loss do you have? If the amount is more than 1%, it is worth negotiating an adjustment.
How to verify: After applying for a refund, check how much USDC actually arrives in your wallet, and compare it with the theoretical amount calculated from the invoice amount and the exchange rate on the payment date. If the platform does not list a separate 'exchange rate fee' for the missing part, that part is already included in the refund amount, and you need to record it yourself.
