A former Apple iOS engineer has launched a Visa card that conceals cryptocurrency transactions through advanced cryptographic technology, addressing what he calls a fundamental flaw in existing blockchain financial services. Sid Gandhi, co-founder of Polybase Labs, spent three years developing the Payy card, which uses zero-knowledge proofs and a custom-built ledger to prevent the public tracing of stablecoin transactions that plague other non-custodial payment solutions.
What to Know:
- The Payy Visa card uses zero-knowledge proofs and a custom blockchain network to hide stablecoin transactions from public view
- Gandhi argues that existing on-chain financial services violate privacy principles and potentially GDPR regulations by making all transactions publicly visible
- The card combines regulatory compliance with privacy technology, allowing users to spend self-custodied stablecoins without revealing blockchain activity
Privacy Concerns Drive Innovation
Gandhi views the current state of blockchain financial services as fundamentally flawed. He considers it "irresponsible, unethical, even borderline illegal" to offer users financial services where transactions and balances remain publicly visible on blockchains permanently. The General Data Protection Regulation adds another layer of concern to this visibility.
"Either I'm crazy or everyone else is crazy, because you just can't build a financial system without the core pillar of confidentiality," Gandhi said in an interview. The Polybase Labs CEO warns of a "scary future" where IP addresses can be linked to blockchain wallets. This would allow on-chain activity to be matched with email accounts, Instagram profiles, or Facebook accounts.
The team spent two years building their layer two payments network from scratch. They avoided using Ethereum Virtual Machine-compatible blockchains, which Gandhi says are not suitable for private payments.
Technical Architecture and Regulatory Approach
The Payy system operates through zero-knowledge proofs that authorize transactions when users tap their card. A Payy Network blockchain transaction then debits the amount from the user's wallet and settles quickly with Visa. This process keeps the actual transaction details hidden from public blockchain explorers.
Gandhi's team drew inspiration from established privacy networks including Zcash, Monero, and Aztec.
However, Payy differs from these earlier privacy blockchains by focusing specifically on private stablecoin transactions while maintaining regulatory compliance from the outset.
"All the other existing privacy technologies don't have this idea of compliance baked in," Gandhi explained. The team recognized that anti-money laundering and compliance operations must continue even within a privacy network.
User Experience and Market Position
Beyond privacy, Gandhi claims his card offers superior onboarding and user experience compared to existing wallet and crypto payment options. He tested numerous solutions and concluded that even sophisticated non-crypto users cannot successfully navigate current offerings.
"Every single iteration of an on-chain bank for the last 10 years that we have seen is not usable," Gandhi said. The team's philosophy centers on creating a product accessible to any user regardless of their cryptocurrency knowledge.
Polybase Labs has secured funding from Robot Ventures, DBA Crypto, 6th Man Ventures, Orange DAO, and Protocol Labs. Robot Ventures partner Robert Leshner described Payy as "a real alternative to consumer banking" that allows users to "save and spend self-custodied stablecoins privately without ever knowing they're on a blockchain."
Understanding Key Technologies
Zero-knowledge proofs represent a cryptographic method that allows one party to prove they possess certain information without revealing the information itself. In Payy's case, users can prove they have sufficient funds for a transaction without disclosing their wallet balance or transaction history.
Stablecoins are cryptocurrencies designed to maintain stable value relative to a reference asset, typically the U.S. dollar. Self-custody means users control their own private keys and funds rather than relying on a third-party service to hold their cryptocurrency.
Layer two networks operate on top of existing blockchains to improve scalability and functionality while inheriting the security properties of the underlying blockchain. Anti-money laundering regulations require financial institutions to monitor and report suspicious transactions to prevent illicit activities.
Closing Thoughts
Gandhi's Payy card represents an attempt to address privacy concerns in cryptocurrency payments while maintaining regulatory compliance. The three-year development process reflects the technical challenges involved in creating private blockchain transactions that work with traditional payment infrastructure.