Private Stablecoin Payments An overview of current options and a direction on the optimal solution. Introduction Today, stablecoin transactions are conducted on transparent blockchains like Ethereum, Solana, and Avalanche, where every transaction is publicly visible. Wallet addresses, token amounts, timestamps, and counterparties can be tracked in real time by anyone. Sophisticated chain analysis tools, used by regulators, forensic firms, and even malicious actors, can deanonymize users, trace flows across platforms, and expose sensitive financial behavior. For enterprises, this level of visibility poses serious risks: revealing supplier relationships, payroll details, and strategic cash movement. For individuals, it compromises privacy, safety, and financial autonomy. In a world where billions in payroll, B2B commerce, and remittances are poised to move onchain, solving onchain transparency is not optional, it’s imperative. Without a scalable, compliant privacy layer, stablecoins will never fully realize their promise as a mainstream financial tool. Stablecoins already account for over $9 trillion in transaction volume annually, and that number is rapidly increasing. This growth is being driven by use cases such as cross-border remittances, B2B settlement, and institutional treasury operations. Yet these flows remain fundamentally exposed onchain. Consider that global payroll payments exceed $50 trillion per year, while B2B payments total over $120 trillion. If even a small fraction of these move onchain, the lack of privacy becomes a critical bottleneck. Companies cannot afford to expose sensitive financial workflows to the public, and regulators will not approve enterprise adoption without compliance-ready controls. The opportunity is massive, but only if the infrastructure is built to accommodate enterprise privacy at scale. This paper surveys the landscape of privacy-preserving technologies for stablecoin payments, outlines their tradeoffs, introduces key competitors, and explains why Trusted Execution Environments (TEEs) offer the most practical, scalable, and compliant path forward. 1. Zero-Knowledge Proofs (ZK) Everybody's favorite onchain privacy solution is amazing tech. But it has some drawbacks that ultimately hold it back from mass adoption. What are they? Well, ZK systems allow a party to prove a statement (like the validity of a transaction) without revealing the underlying data. Systems like Aztec, Tornado Cash, Zcash, and the upcoming zkSync 3.0 use zk-SNARKs or zk-STARKs to enable private transfers and shielded balances. I respect the elegance of the cryptography, but as a product builder focused on real-world adoption, I’ve found ZK too rigid and computationally expensive. The requirement to wrap assets and re-engineer protocols is a dealbreaker for enterprises that want to move fast without overhauling their stack. Pros: Strong cryptographic privacy No need to trust hardware or centralized operators Fully decentralized Cons: Computationally expensive (proof generation and verification) Difficult to selectively disclose information (rigid viewing key structures) Requires custom asset wrappers (i.e., shielded tokens) Limited compatibility with existing ERC-20 tokens 2. Fully Homomorphic Encryption (FHE) FHE allows computations on encrypted data without ever decrypting it. This could theoretically allow an onchain smart contract to process payments without ever seeing sensitive data. I love the theory, but the tech just isn’t ready. It’s too slow, too brittle, and not production viable. We can’t ask businesses to wait 10 minutes per transaction or operate with experimental cryptographic systems in critical infrastructure. Pros: Strong privacy guarantees Enables arbitrary computation on encrypted data Cons: Currently too slow and impractical for production use Tooling is immature Poor integration with public blockchains Difficult or impossible to support selective disclosure or compliance hooks 3. Private Blockchains / Permissioned Chains Networks like R3 Corda, Canton Network (by Digital Asset), and Hyperledger Fabric offer private, permissioned infrastructure for institutions. These systems offer transaction privacy by restricting who can see what data. But I’ve worked with enterprise teams, and they don’t want to leave public infrastructure behind. Fragmented liquidity, vendor lock-in, and the inability to interoperate with DeFi are major non-starters for future-facing companies. Pros: Strong enterprise controls Support for traditional legal constructs (KYC, contracts, compliance) High throughput Cons: No public settlement guarantees Limited interoperability with DeFi or public stablecoins Requires institutional buy-in to participate 4. Confidential Smart Contracts (ZK + MPC Hybrids) Solutions like Secret Network and Oasis use secure enclaves or ZK circuits to enable encrypted smart contract logic. Circle is also experimenting with a confidential ERC-20 framework using custom token contracts. This is closer to what we need, but it still forces teams to adopt custom infrastructure and token logic, which slows everything down. It’s like trying to redesign the car to install tinted windows. Pros: Programmable private logic Onchain execution with privacy Cons: Requires custom token standards and infrastructure Often doesn’t support compliance-ready auditability Still relatively early-stage or experimental 5. Application-Layer Obfuscation (e.g., ZeroHash, Fireblocks internal netting) Some infrastructure providers use transaction aggregation, internal ledgers, or account abstraction to obscure the path of funds. This is fine for quick wins, but let’s be honest: it’s not cryptographic privacy. It’s just hiding things in a walled garden. As adoption grows and regulators step in, this won’t scale. And it certainly doesn’t empower users or meet the compliance standards of the future. Pros: Simple and already in use Doesn’t require cryptographic changes Cons: Not true cryptographic privacy Centralized operators can be subpoenaed Poor user-level privacy guarantees Competitor Landscape Aztec: ZK-based private asset transfers with custom token model zkSync Prividium: Private chain infrastructure for enterprise privacy via zk-validiums IronFish: L1 built from the ground up for private crypto transactions Secret Network: Confidential smart contract platform using TEEs Circle Confidential ERC-20: Token framework for compliant transfers with encrypted metadata ZeroHash: Centralized B2B crypto infra, privacy via aggregation not encryption Canton Network: Private enterprise chain with compliance hooks and private smart contracts The Case for TEEs in Stablecoin Privacy Trusted Execution Environments (TEEs) provide a unique middle ground. They enable private, offchain transaction execution in a secure enclave, which signs a standard onchain transfer (e.g., USDC) once all conditions are met. This allows you to keep funds and assets on Ethereum or other chains, while hiding transactional metadata like sender, receiver, and amount. TEEs offer critical advantages: they maintain compatibility with native ERC-20 tokens, eliminate the need to re-architect business logic, and allow compliance-friendly selective disclosure. Using attestation, regulators or auditors can verify that enclave code is secure and unmodified, and encrypted logs can provide visibility when required. TEEs run in cloud environments (AWS Nitro, Azure Confidential VMs) and support geo-fencing and jurisdictional control, essential for enterprise deployment. Performance is high, with TEEs enabling near-instant execution and minimal gas. From a legal standpoint, TEEs also hold a unique position. Because TEEs run in hardware-bound environments, their data is not readily accessible, even by the operator, without proper keys or subpoenas. This creates legal clarity: just like with cloud storage, governments generally need a warrant to compel data access. This gives institutions confidence that user data is protected unless due process is followed, something ZK and FHE cannot currently offer. Real-World Use Cases A TEE-based privacy layer unlocks numerous mission-critical use cases: Payroll: Multinational firms can process private salary payments onchain without exposing employee wages. Cross-border trade: Businesses can settle with offshore suppliers without revealing invoice-level detail on public blockchains. Fintech wallets: Consumer wallets can shield balance and transfer history while enabling regulatory visibility. Treasury ops: Funds can rebalance positions across wallets without publicly leaking trading strategies. Example: A fintech startup could plug into the TEE privacy API and offer “confidential USDC wallets” in just days, without building a new chain or token wrapper. Why Regulators and TradFi Prefer TEEs Unlike experimental cryptographic systems, TEEs align with today’s legal frameworks. They allow: Attested logs and audit trails Jurisdictional Deployment: Enforced compliance policies at the compute layer. For banks, fintechs, and PSPs, this means lower legal risk and higher confidence in adoption. Selective disclosure, geofencing, and attestation offer the kind of visibility regulators are demanding, while maintaining end-user privacy. Vision: What Comes Next In the next few years, we expect the rise of enclave-native stablecoin infrastructure: programmable, composable, and invisible. Enclave-to-enclave transfers, cross-border enclave routing, AI-driven payments, and embedded compliance logic will define a new category: Trusted Private Payments. The long-term vision is an ecosystem where individuals and businesses can send stablecoin payments privately and securely, with programmable compliance, native interoperability, and public settlement guarantees. Our TEE-based solution is building toward that future. Conclusion There is no one-size-fits-all solution to stablecoin privacy, but for institutions that demand real compliance, fast integration, and compatibility with existing stablecoin infrastructure, TEEs offer the most viable option today. They bridge the gap between privacy and auditability, and can be deployed incrementally without rewriting the financial stack. As demand for private stablecoin payments grows across payroll, B2B commerce, and remittances, TEE-based infrastructure offers the fastest and most compliant way to bring these flows onchain.

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