Privacy-Centric Version of Circle's USDC Stablecoin Rolling Out via Aleo Network

In brief

• USDC issuer Circle is partnering with Aleo to launch USDCx, a privacy-focused, interoperable stablecoin.
• USDCx on Aleo will allow users to protect sensitive data like transaction history while remaining compliant with regulations.
• The launch is the second powered by Circle’s new xReserve platform, which allows blockchains to launch USDC-backed stablecoins.

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A new privacy-focused stablecoin powered by USDC issuer Circle is launching on Aleo network’s testnet, the blockchain’s foundation announced on Tuesday.

Created in partnership with Circle via its xReserve platform, Aleo’s USDCx is a private, interoperable dollar-backed stablecoin that allows users to adhere to regulatory standards while protecting select, sensitive user data or transaction histories.

“We have a robust pipeline of organic inbound interest from both existing stablecoin users and those interested in using stables but have been waiting for confidential payments infrastructure like USDCx on Aleo,” Josh Hawkins, EVP of strategy, policy, and communications at Aleo, told Decrypt.

“This demand spans everything from payroll and infrastructure modernization to foreign aid to national security,” he added.

Some specific examples of the use cases for the private and programmable stablecoin include secure global payroll payments and remittances, without revealing income or spending habits.

“We’re focused on making sure customers who have been asking for a private stablecoin across a variety of use cases begin building and taking advantage of the seamlessness and interoperability provided by USDCx, making it easy to get in and out, and improving the usability of private stablecoins,” said Hawkins.

The token is expected to launch on Aleo’s mainnet by the end of January, he added.

Aleo raised $28 million in 2021 from notable firms like a16z and Coinbase Ventures to focus on blockchain privacy using zero-knowledge proofs. The network is the second blockchain to partner with Circle on an interoperable USDCx launch, following a similar launch via the Canton blockchain last week.

Both come less than a month after the unveiling of Circle’s xReserve platform, a new infrastructure project that allows blockchains to launch their own USDC-backed stablecoins that can interoperate with native USDC, ultimately unifying liquidity and creating a simpler user experience.

Circle’s xReserve launch is the latest stablecoin functionality expansion from the firm, which is working on its own layer-1 network specifically designed for stablecoins called Arc.

The firm completed a massively successful IPO in June, and has seen its USDC stablecoin market cap nearly double in the last year, now with more than $78 billion in circulation according to data from DefiLlama.

Shares of CRCL are up around 6% on Tuesday, recently changing hands above $89.00.