Circle is gearing up for a strategic leap: the launch of USDCx, a “private” version of its flagship stablecoin, built on Aleo, a blockchain specialized in encrypted transactions. The goal is clear: to offer businesses and financial institutions a usable onchain stablecoin without publicly exposing their flows, revenues, or commercial strategies.
A private stablecoin for the public, readable for regulators
In his interview with Fortune, Howard Wu, co-founder of Aleo, sums up the issue. Public blockchains expose everything: balances, histories, economic behaviors. A major hurdle for banks and large companies.
USDCx thus masks transactional information through Aleo’s cryptography. To an external observer, transfers will appear as simple, unreadable “data blobs.”
But privacy is not absolute. Each transaction includes a “compliance record,” an encrypted data that Circle can decrypt if requested by judicial or regulatory authorities. Wu presents this as a deliberate compromise:
This is bank-level confidentiality, not “privacy privacy.”
Banks and Payment Giants Push Towards Tokenized Finance
USDCx arrives in a context where major institutions are finally embracing blockchain rails, provided they find tools tailored to their security, privacy, and compliance needs.
Tokenization is catalyzing this transition. BlackRock has launched BUIDL, its fully tokenized money market fund. Robinhood is experimenting with blockchain share trading. Stripe is injecting significant capital into stablecoins to modernize payments. Larry Fink, CEO of BlackRock, emphasized in his letter to investors:
Every stock, every bond, every fund, every asset, can be tokenized.
For Wu, the demand is already strong. Crypto payroll providers like Request Finance or Toku are considering integrating USDCx for sensitive operations. Prediction markets, which leverage functional anonymity to encourage liquidity, are also showing interest.
A Regulated and Stable Alternative to Privacy-oriented Cryptos?
Aleo is not alone in the privacy niche: Zcash and a few other protocols already offer end-to-end encrypted transactions. However, these cryptocurrencies suffer from inherent volatility that makes them difficult to use for payroll, treasury, or commercial settlement.
USDCx, backed by the dollar, fills a gap: a stable, compliant asset that does not expose financial operations to public scrutiny.
