Circle (CRCL) Stock: USDC Issuer Partners with Aleo for Privacy-Enhanced Stablecoin Launch

TLDR

• Circle is developing USDCx, a privacy-focused version of USDC, in partnership with blockchain company Aleo
• The new stablecoin offers banking-level privacy while maintaining regulatory compliance capabilities
• USDCx launches on Aleo’s testnet now with mainnet deployment expected by end of January
• The project uses Circle’s xReserve platform, which allows blockchains to create USDC-backed stablecoins
• Circle shares jumped 6% on Tuesday, trading above $89 following the announcement

Circle is launching a privacy-enhanced stablecoin that could change how institutions use blockchain payments. The USDC issuer partnered with Aleo to create USDCx, targeting banks and enterprises that need confidential transactions.

The new token addresses a major problem for financial institutions. Most blockchains show all transaction details publicly. That’s a dealbreaker for companies handling sensitive payment data.

USDCx provides what Aleo calls banking-level privacy. Wallet addresses and transaction details stay hidden. But Circle can still provide compliance records when regulators or law enforcement request them.

Circle Internet Group, CRCL

The stablecoin is now live on Aleo’s testnet. Mainnet launch is scheduled for late January.

Aleo raised $28 million in 2021 from a16z and Coinbase Ventures. The network uses zero-knowledge proofs to enable private transactions. Co-founder Howard Wu says demand for private stablecoins is growing fast.

Privacy Demand Grows in Corporate America

Josh Hawkins, EVP at Aleo, told reporters the company has strong interest from existing stablecoin users and new adopters. Use cases range from payroll to foreign aid to national security applications.

Companies can now send global payroll payments without revealing employee income. Businesses making remittances can protect spending patterns. These features weren’t possible with traditional public blockchains.

The timing aligns with recent regulatory changes. The US GENIUS Act created a framework for dollar-pegged tokens. That sparked a corporate stablecoin race.

Citigroup partnered with Coinbase to test stablecoin payment systems. JPMorgan and Bank of America are running early experiments. Western Union is building a settlement system on Solana.

xReserve Platform Powers Expansion

USDCx runs on Circle’s new xReserve platform. The infrastructure lets blockchains launch their own USDC-backed tokens. These tokens interoperate with native USDC.

Canton blockchain launched a similar USDCx version last week. Aleo is the second network using xReserve. The platform unifies liquidity across different blockchains.

Circle is also building Arc, a layer-1 network designed specifically for stablecoins. The company completed its IPO in June. USDC market cap nearly doubled in the past year to over $78 billion.

Aleo isn’t alone in pushing for stablecoin privacy. Taurus developed a private smart-contract system for anonymous transactions. That system targets intracompany payments and employee payrolls.

Visa expanded its stablecoin offerings recently due to growing competition. USDC and Tether’s USDt control roughly 85% of the stablecoin market. Other dollar-linked tokens include synthetic dollars and PayPal USD.

Circle shares rose 6% on Tuesday, trading above $89. The stock gained after news of the Aleo partnership broke. USDCx on Aleo testnet is currently available for developers to build applications.

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