USDCx – the privacy-enhanced version of USDC developed by Circle in collaboration with Aleo – aims for 'bank-grade privacy' for institutional blockchain payments while still allowing Circle to provide compliance records when requested, amidst the increasing competition in the enterprise stablecoin space following the US GENIUS Act in the US.
USDCx is specifically designed for banks and businesses that want to leverage the speed and efficiency of on-chain payments but do not accept the public disclosure of internal cash flows on the public ledger. Meanwhile, Citigroup, JPMorgan, Bank of America, Western Union, and Visa are accelerating the testing of stablecoin infrastructure.
MAIN CONTENT
Circle develops USDCx, a privacy-enhanced version of USDC, aimed at 'bank-level privacy' for organizations.
USDCx balances transaction data security with the ability to provide compliance records to regulatory authorities.
The US GENIUS Act triggers the corporate stablecoin race, with financial giants simultaneously experimenting with blockchain.
USDCx provides 'bank-level privacy' on the blockchain
USDCx is Circle's new stablecoin version, designed for banks and businesses that need the speed of blockchain payments but do not want sensitive transaction details exposed on a public ledger.
According to Circle, USDCx is a privacy-enhanced version of USDC designed for organizations, allowing them to utilize blockchain infrastructure while keeping internal cash flows confidential. This is a significant step towards integrating on-chain payments deeper into traditional finance, where security and compliance requirements are always at their highest.
The project emerges at a time when many large institutions are accelerating their research on stablecoins following the US GENIUS Act. As corporations become accustomed to 'banking-level privacy' standards, a stablecoin that is both private and compliant like USDCx could become a natural bridge between banking payments and blockchain rails.
Design that balances privacy and compliance
The goal of USDCx is to reconcile two seemingly opposing factors: concealing on-chain activities from the public while still maintaining the ability to provide data to regulators when needed. Circle asserts that it can create compliance records when receiving official requests from authorities.
This model addresses a major concern for organizations: if the entire flow of internal payments is revealed on a public blockchain, competitive secrets and sensitive data could be exposed. With USDCx, businesses benefit from the immediacy and programmability of blockchain without sacrificing all privacy.
Aleo and the technology platform for USDCx
According to a report from Fortune, USDCx was developed alongside the privacy-focused blockchain developer Aleo. Co-founder Howard Wu stated that the goal is to bring bank-level security to blockchain rails, which are inherently transparent regarding addresses and transactions.
Aleo firmly believes that the level of transparency often seen as a strength of blockchain becomes a weakness in a corporate environment, where privacy is not an option but a necessity. Zero-knowledge technology and cryptographic proof mechanisms are used to conceal information while still allowing verification.
Transparency can be a strength of blockchain for everyday users, but in a corporate context, where cash flows and internal data are extremely sensitive, it quickly becomes a weakness without the proper privacy layer.
– Howard Wu, co-founder of Aleo, 2025
USDCx compared to other secure stablecoin solutions
USDCx is not the only solution aimed at privacy for stablecoins, but it stands out due to Circle's position in the market and its focus on institutional customers.
Alongside USDCx, the digital asset infrastructure provider Taurus has introduced a private smart contract framework, allowing the transfer of stablecoins without publicly disclosing the identity of the counterparties or transaction details. This design targets use cases like corporate payroll or internal payments among entities within the same group.
The simultaneous emergence of USDCx and similar solutions from Taurus indicates a real demand for 'controlled anonymity' digital currencies in businesses. Instead of being completely hidden like some privacy coins, these designs prioritize providing selective visibility to authorized parties, maintaining auditability when needed.
The corporate stablecoin race following the US GENIUS Act
The US GENIUS Act, the first comprehensive legal framework for USD stablecoins in the U.S., has triggered a wave of new stablecoin experimentation within the traditional finance and payment technology sectors.
After the US GENIUS Act was implemented, many analysts described the current landscape as a 'corporate stablecoin race.' Citigroup is partnering with Coinbase to experiment with stablecoin payment rails, while JPMorgan and Bank of America are researching payment concepts and settlements on their own blockchain or licensed solutions.
Western Union is building a digital asset settlement platform on Solana and plans to issue its own US Dollar Payment Token (USDPT), focusing on remittances and cross-border transfers. In parallel, Visa expanded its integration of stablecoins to maintain its competitive edge in the global payment market.
Circle's position in the institutional stablecoin wave
USDC has been one of the two dominant stablecoins in terms of usage scale, so Circle's development of USDCx shows a strategy targeting the institutional segment – where compliance and security demands are significantly higher than for individual users. The new product is positioned at the intersection of legal, technological, and business needs.
By combining the familiar stablecoin brand with Aleo's privacy technology, Circle has the opportunity to become the 'default' on-chain payment infrastructure provider for banks and corporations. This could also drive additional demand for custody solutions, treasury management, and other financial products surrounding USDCx.
The stable market share of USDC and USDT within the stablecoin ecosystem
USDC and USDT account for about 85% of total stablecoin activity in the market, according to data from Visa Onchain Analytics, while aggregated dollar coins and PayPal's PYUSD have also become notable players.
In the context where the two 'giants' USDC and USDT dominate much of the liquidity and stablecoin volume, Circle's launch of USDCx is seen as a strategic move to unlock a new wave of acceptance. Instead of focusing on retail expansion, the product directly targets the institutional user base, which has more complex demands regarding risk, compliance, and security.
The combination of USDC's existing market share, increased demand following the US GENIUS Act, and new use cases such as corporate payroll, internal payments, remittances, or cross-border settlements could create new growth space for USDCx. However, the actual level of success will also depend on how detailed regulations are implemented and the level of acceptance by regulatory authorities.
Frequently Asked Questions
What is USDCx and how does it differ from regular USDC?
USDCx is a privacy-enhanced version of USDC developed by Circle in collaboration with Aleo, aimed at institutional customers. Unlike regular USDC, USDCx conceals transaction details from the public but still allows Circle to provide records to authorized regulatory authorities when necessary.
How does USDCx protect privacy while still complying with regulations?
USDCx uses security and privacy technology to hide transaction information on-chain from outsiders, while Circle maintains the ability to retrieve and aggregate data for investigative, anti-money laundering, or other regulatory purposes from legitimate authorities.
What impact does the US GENIUS Act have on the corporate stablecoin race?
The US GENIUS Act is the first comprehensive legal framework for USD stablecoins in the U.S., helping to mitigate legal risks for organizations. After the law was implemented, many corporations like Citigroup, JPMorgan, Bank of America, Western Union, and Visa accelerated their stablecoin testing and blockchain payment solutions.
Source: https://tintucbitcoin.com/circle-day-manh-chien-luoc-stablecoin-rieng-tu-voi-usdcx/
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