Why can’t Circle freeze a USDC account on Cardano or block a transaction?
Because USDCx on Cardano is a native asset.
USDC has the same properties as ADA after minting, including storage in the ledger and transfer.
A mint script can be used to mint and burn assets. For burning, the script owner needs to have assets on their own address.
Once the issuer sends USDC to the recipient’s address, the recipient has full control over the assets. The transfers of assets are handled by the Cardano protocol.
The issuer (script owner) has no control over the assets.
The Cardano protocol handles the operations that users perform.
When Alice sends USDC to Bob, the only one who validates the transaction is the Cardano network. All valid transactions will be processed. There is no way to prevent this.
A third party would have to force all SPOs not to include the transaction in the block.
Transfers to Cardano are safe and cheap, because it is not necessary to process a smart contract (which is computationally more intensive than just using the protocol logic).
Why is it possible to block transactions and freeze an account on EVM chains like Ethereum?
A smart contract is always used for the transfer of assets. So, any logic can be included.
A smart contract is used for minting and transferring assets. It handles all operations with assets that users perform.
This has some advantages, because the behavior of assets can be defined. I like the flexibility. It is useful for many use cases.
However, control over assets can also be abused.
This is exactly what Circle utilized. They inserted logic into the smart contract to blacklist an account or prevent a transaction.
When Alice sends USDC to Bob, the transaction is processed by a smart contract, which is controlled by Circle. Circle is a third party that can prevent the transaction.
EVM transactions can theoretically be more expensive, because it is necessary to execute a smart contract.
There was an unclear situation around USDC and USDT. It was said that Circle and Tether do not want to mint stablecoins on Cardano because they want (maybe have to) retain control.
Let's be happy that Pentad delivered and we have USDCx as a native asset.