Stablecoin issuer Circle plans to launch a privacy-focused version of its dollar-pegged token in partnership with layer-1 blockchain Aleo. The new stablecoin, called USDCx, will obscure transaction histories while maintaining compliance features that allow Circle to share data with authorities when required.
What Happened: Privacy Launch
Aleo co-founder Howard Wu told Fortune the initiative addresses privacy concerns from businesses that don't want competitors viewing their transaction data on transparent blockchains.
"People don't want to reveal their business revenues. They don't want to reveal business intelligence," Wu said. "But the way that transparent blockchains work today unfortunately means that every time you transact, you are leaking that data."
USDCx won't offer complete anonymity.
Public blockchain observers will see only encrypted data, but each transaction includes a compliance record accessible to Circle for regulatory inquiries.
"This is banking-level privacy, as opposed to 'privacy privacy,'" Wu said.
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Why It Matters: Business Demand
Crypto payroll processors Request Finance and Toku have expressed interest in the privacy-enabled stablecoin, according to Wu. Prediction markets where users bet on real-world events have also shown curiosity about experimenting with USDCx.
Privacy-focused cryptocurrencies like Zcash already exist but experience significantly higher price volatility than stablecoins backed by traditional assets.
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