Privacy layer-1 blockchain Aleo has launched the privacy-protecting USAD stablecoin in cooperation with Paxos Labs on a zero-knowledge (ZK)-based layer-1 blockchain.

A recent report by The Block said the move is part of an effort to provide a solution that can protect business details while maintaining the transparency of blockchains. Circle has also worked with Aleo to launch USDCx.

Aleo COO Rina Lim (리나 임) said, "It was designed to protect sensitive user information while meeting regulatory requirements by using Paxos issuance infrastructure."

USAD is expected to offer programmable use cases that are difficult to support on blockchains that require full transparency, as well as traditional payments. Aleo uses zero-knowledge cryptography to hide sensitive information such as transaction participants, wallet addresses and transaction amounts while preserving auditability.

Paxos has issued stablecoins for major companies including PayPal and Binance, and it also plays an important role in the Global Dollar (USDG) stablecoin, which includes participants such as Anchorage Digital, Bullish, Kraken, OKX, Robinhood and World.