Circle Pushes Into Privacy with USDCx, a New Institution-Focused Stablecoin

Circle is developing a privacy-enhanced version of USDC, aiming to meet growing institutional demand for confidential onchain transactions. The new token, called USDCx, is being built with the privacy-first blockchain Aleo, Fortune reported, citing Aleo co-founder Howard Wu.

Unlike traditional stablecoins,where wallet activity is fully transparent on public blockchains USDCx is designed to offer “banking-level privacy.” While transaction details would be shielded from the public, Circle would still be able to provide compliance records to regulators or law enforcement when required.

The initiative targets a major pain point for banks and enterprises that have held back from blockchain rails due to the visibility of their transaction flows.

Vincent Liu, CIO at Kronos Research, shared his insights on the new stablecoin rollout, saying:

“Privacy isn’t a niche feature anymore, it’s the missing infrastructure layer institutions have been waiting for. Circle’s move with USDCx signals that stablecoins are entering a maturity phase where compliance and confidentiality can finally coexist.”

Aleo has long argued that privacy is a prerequisite for the next wave of stablecoin adoption. In a May post, the company said transparency becomes a “liability” when payments involve sensitive or confidential data. Other firms are moving in the same direction: as previously reported, Taurus has built a private smart-contract system enabling anonymous stablecoin transfers for corporate payments and payroll.

Stablecoins take center stage in U.S. corporate adoption

Circle’s USDCx effort lands amid a surge of institutional stablecoin experimentation following the U.S. GENIUS Act, the new regulatory framework for dollar-pegged tokens.

Citigroup has teamed up with Coinbase to test stablecoin-based payment rails, while JPMorgan, Bank of America, and other major firms are also exploring similar technology. Western Union is building a Solana-based settlement system that includes a U.S. dollar payment token, and Visa continues to expand its stablecoin integrations.

Average stablecoin supply by issuer. Source: Visa Onchain Analytics

Today, dollar-backed stablecoins dominate the market: USDC and Tether’s USDt account for around 85% of global supply, with synthetic dollars and PayPal’s PYUSD also among the leading issuers.