Stablecoin issuer Circle is developing a more privacy-pegged version of its USDC token, aiming to spur institutional adoption by providing greater confidentiality than customary public blockchains allow.
The fresh stablecoin, called USDCx and intended for banking and enterprise users, is being created in partnership with Aleo, Fortune, a blockchain technology company focused on privacy. reported on Tuesday, citing Aleo co-founder Howard Wu.
Unlike most existing stablecoins, which have wallet addresses and transaction details fully observable on-chain, USDCx is designed to provide “bank-grade privacy.” The report shows that Circle will still be able to provide its compliance history if law enforcement or regulators request information about specific transactions.
The initiative aims to address a key hurdle facing major financial institutions, many of which are hesitant to employ blockchain-based payment rails because their transaction flows would be publicly observable.
Aleo has long argued that privacy is imperative in the next phase of stablecoin adoption. In May postthe company wrote that while transparency is often promoted as a core benefit of blockchain, it “becomes a liability when dealing with sensitive, confidential payment data.”
Aleo isn’t the only company pushing for privacy in stablecoins. As Cointelegraph reports, digital asset infrastructure provider Taurus has developed a private shrewd contract system for stablecoins designed to enable anonymous transactions. This approach aims to escalate the employ of stable assets for intercompany payments and employee compensation.
Related: Banking lobby ‘panicking’ over yielding stablecoins
Stablecoins are taking center stage in corporate America
Circle’s move into privacy-focused stable assets comes as more vast institutions begin exploring stablecoins in the wake of the US GENIUS Act, a fresh regulatory framework governing US dollar-pegged tokens.
As Cointelegraph reports, a corporate stablecoin race is starting in the wake of GENIUS. Citigroup has partnered with Coinbase to test stablecoin-based payment rails for its clients, while other Wall Street companies including JPMorgan and Bank of America are reportedly in the early stages of experimenting with similar technologies.
Global remittance provider Western Union is also building a digital asset settlement system on Solana and plans to introduce a US dollar payment token as part of an infrastructure overhaul. Meanwhile, global payments giant Visa has expanded its stablecoin offerings amid growing competition in the market.
The US dollar underpins the expansive majority of global stablecoin activity. USDC (USDC) and Tether’s USDt (USDT) together make up about 85% of the market, while other dollar-pegged tokens, including synthetic dollars and PayPal USD (PYUSD), are also among the largest.
Related: Crypto Biz: Wall Street giants are betting on stablecoins
