Ethereum layer-2 Polygon has launched a private stablecoin payment feature to attract corporate and institutional on-chain payments, Cointelegraph reported on Monday.
The feature introduced by Polygon allows users to process transactions through a private processing space, or shielded pool, verified using zero-knowledge proofs and isolated so transaction information cannot be viewed from outside. Based on the Hinkal privacy protocol, it hides the sender, recipient and amount on-chain while enabling regulatory compliance through KYT (Know Your Transaction) screening and audit files.
Regulatory compliance is maintained in 2 ways. All private transactions undergo KYT screening before execution. Users can also generate audit files that can be submitted to tax authorities or regulators.
Polygon stressed that the biggest reason institutions do not move substantial stablecoin transaction volumes on-chain is a lack of confidentiality. It said companies need privacy for on-chain payments to become mainstream, not privacy to avoid regulators but privacy needed for operations.
Chi-gyu Hwang (황치규)
delight@d-today.co.kr