Circle, the issuer of stablecoin, is crafting a privacy-oriented version of its USDC token, aiming to enhance institutional adoption by providing more confidentiality than traditional public blockchains permit.
This new stablecoin, named USDCx and tailored for banking and enterprise clients, is being developed in collaboration with Aleo, a blockchain company focused on privacy, as reported by Fortune on Tuesday, citing Aleo co-founder Howard Wu.
In contrast to most existing stablecoins, which expose wallet addresses and transaction data on-chain, USDCx is engineered to offer “banking-level privacy.” Circle will still be able to supply compliance records if law enforcement or regulators request information about specific transactions, according to the report.
This initiative seeks to overcome a significant obstacle for major financial institutions, many of which have been reluctant to adopt blockchain-based payment systems due to publicly visible transaction flows.
Aleo has consistently argued that privacy is crucial for the next wave of stablecoin adoption. In a May post, the firm mentioned that, while transparency is touted as a fundamental blockchain advantage, “it becomes a liability when handling sensitive, confidential payment data.”
Aleo is not the only entity advocating for privacy in stablecoins. Cointelegraph reported that Taurus, a digital asset infrastructure provider, has created a private smart-contract system for stablecoins aimed at enabling anonymous transactions. This methodology seeks to increase the utilization of stable assets for intracompany payments and payroll.
Related: Bank lobby is ‘panicking’ about yield-bearing stablecoins
Stablecoins take center stage in corporate America
Circle’s entrance into privacy-focused stable assets coincides with more major institutions investigating stablecoins following the US GENIUS Act, a new regulatory framework for US dollar–pegged tokens.
As reported by Cointelegraph, a race towards corporate stablecoins is developing in the aftermath of GENIUS. Citigroup has teamed up with Coinbase to trial stablecoin-based payment systems for its clientele, while other Wall Street firms, including JPMorgan and Bank of America, are reportedly in the early phases of exploring similar technologies.
Western Union, a global remittance provider, is also creating a digital asset settlement system on Solana, planning to incorporate a US Dollar Payment Token in its infrastructure overhaul. Meanwhile, Visa, a global payments leader, has expanded its stablecoin offerings amidst intensifying competition in the industry.
The US dollar serves as the foundation for the majority of global stablecoin activity. USDC (USDC) and Tether’s USDt (USDT) together comprise approximately 85% of the market, while other dollar-associated tokens, including synthetic dollars and PayPal USD (PYUSD), also rank among the largest.
Related: Crypto Biz: Wall Street giants bet on stablecoins
