Circle, the issuer of the US DC stablecoin, is creating a privacy-enhanced version called USDCx, which aims to boost institutional adoption by offering better confidentiality than what traditional public blockchains provide.
The new stablecoin, aimed at banking and enterprise users, is being developed in collaboration with Aleo, a privacy-focused blockchain company, as reported by Fortune on Tuesday, citing Aleo co-founder Howard Wu.
Unlike existing stablecoins, which feature fully visible wallet addresses and transaction details on-chain, USDCx is designed to offer “banking-level privacy.” Circle will still maintain the ability to provide compliance records upon requests from law enforcement or regulators regarding specific transactions, according to the report.
This initiative seeks to overcome a significant barrier for major financial institutions, many of which have been reluctant to use blockchain-based payment systems due to the public visibility of their transaction flows.
Aleo has consistently emphasized that privacy is critical for the next phase of stablecoin adoption. In a May post, the company stated that while transparency is frequently highlighted as a key blockchain advantage, “it becomes a liability when dealing with sensitive, confidential payment data.”
Aleo is not alone in advocating for privacy in stablecoins. As Cointelegraph previously reported, the digital asset infrastructure provider Taurus has created a private smart-contract system for stablecoins, aimed at facilitating anonymous transactions. This method seeks to enhance the use of stable assets for intra-company payments and employee salaries.
Related: Bank lobby is ‘panicking’ about yield-bearing stablecoins
Stablecoins take center stage in corporate America
Circle’s venture into privacy-centric stable assets coincides with an increasing number of major institutions investigating stablecoins following the passage of the US GENIUS Act, a new regulatory framework governing US dollar–pegged tokens.
As reported by Cointelegraph, a corporate stablecoin race is unfolding in the aftermath of GENIUS. Citigroup has partnered with Coinbase to trial stablecoin-based payment solutions for its clients, while other Wall Street firms, such as JPMorgan and Bank of America, are reportedly in the early phases of testing similar technologies.
Global remittance leader Western Union is also implementing a digital asset settlement system on Solana, with plans to roll out a US Dollar Payment Token as part of its infrastructure upgrade. Meanwhile, global payments giant Visa has expanded its stablecoin offerings in light of increasing competition in the sector.
The US dollar forms the foundation of the majority of global stablecoin activity. USDC (USDC) and Tether’s USDt (USDT) collectively make up about 85% of the market, while other dollar-linked tokens, including synthetic dollars and PayPal USD (PYUSD), also rank among the largest.
Related: Crypto Biz: Wall Street giants bet on stablecoins
