"Blockchains are public databases. That's an immediate roadblock for large institutions like banks, whose clients largely don't want their balances and payments history open to prying eyes. Now, the crypto giant Circle has partnered with the blockchain Aleo to launch a "private" version of its stablecoin called USDCx, which will obscure transaction histories, Howard Wu, cofounder of Aleo, told Fortune."
"The new Circle-backed token, which like other stablecoins is pegged to underlying assets like the U.S. dollar, won't be truly private. Every transaction of the token will include what Wu called a "compliance record," which Circle will be able to access in case law enforcement or other authorities reach out about specific transactions. Still, for public users looking at a blockchain log, the transactions will look unintelligible and like "blobs of data," Wu said. "This is banking-level privacy, as opposed to 'privacy privacy,' he added."
Blockchains are inherently public, creating privacy concerns for banks and clients who do not want balances or payment histories visible. Circle and Aleo introduced USDCx, a stablecoin designed to obscure transaction details from public blockchain viewers while embedding a retrievable compliance record. Circle will retain the ability to access compliance records for law enforcement or regulatory requests, so transactions are not entirely anonymous. Public chain entries will appear as unintelligible data blobs, offering banking-level privacy rather than full anonymity. The launch coincides with broader institutional interest in tokenization of assets and financial infrastructure.
Read at Fortune
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