Alea Research, a research firm specialising in virtual assets, defined USDCx as a “privacy stablecoin that protects corporate information while complying with regulations” in its latest report.

Alea Research shared the technical principles of USDCx in a report titled “Aleo - Institutional entry of privacy stablecoins.” Aleo is a compliance-oriented privacy layer-1 blockchain.

USDCx is a privacy stablecoin issued on Aleo’s own mainnet last month on the 27th in collaboration with stablecoin issuer Circle International. It is pegged 1-to-1 to the value of USDC.

The report detailed how Aleo-based USDCx addresses financial data exposure, which has been cited as a limitation of existing stablecoins.

According to the report, USDCx includes a “selective disclosure” function that resolves the issue of transfer amounts and receiving addresses being exposed on the blockchain when using existing stablecoins.

At the same time, unlike general privacy coins, it allows tax authorities and law enforcement agencies to verify transaction details. All transactions record compliance logs in encrypted form, and users can disclose the contents only to authorised institutions through “view keys.”

The core of USDCx is Aleo’s zero-knowledge proof (ZKP) technology. Existing public blockchains disclose all transaction histories to the network, but USDCx performs calculations off-chain on the user’s device and submits to the chain only a mathematical proof that the result is valid. Aleo explained that this allows the network to pass verification while keeping sensitive data such as the sender, recipient and transaction amount encrypted.

An Aleo official said, “USDCx is not about bypassing regulations, but a technology to protect information that must not be exposed, such as corporate trade secrets.” The official added, “Starting with the publication of this report, we will further expand our USDCx partners.”