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Circle and Aleo to Launch USDCx on Aleo L1, Enabling Encrypted, Auditable Stablecoin Transfers for Enterprises

Zero-knowledge privacy with compliant disclosure targets payroll and B2B confidentiality as Paxos–Aleo’s USAD signals rising private-stablecoin competition.

December 9, 2025

Aleo to Launch USDCx, a Private and Programmable Stablecoin Built for Real-World Use

Companies mentioned:

Circle

Circle

Quick Take
  • Circle and Aleo will introduce USDCx on Aleo, offering encrypted but auditable stablecoin transfers designed for enterprises.
  • Targeted use cases include payroll and B2B payments; selective disclosure aims to satisfy compliance requirements.
  • Paxos and Aleo’s USAD highlights growing competition for privacy-preserving, institutional-grade stablecoin rails.

Aleo, the zero-knowledge Layer 1 blockchain, has officially launched USDCx, a dollar-pegged stablecoin fully backed by USDC held in Circle’s xReserve, marking the first time a major regulated stablecoin issuer has natively supported a privacy-first blockchain.

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Now live on Aleo Testnet, USDCx combines the stability and regulatory transparency of Circle’s USDC with Aleo’s default-on programmable privacy. Every transfer, balance, and transaction involving USDCx remains encrypted on-chain while still being provably backed 1:1 by attested USDC reserves—no bridges, no custodians, no third-party risk.

The integration is powered by Circle xReserve, a non-custodial smart contract system, working in tandem with Circle’s Cross-Chain Transfer Protocol (CCTP) and Gateway. This enables native, burn-and-mint interoperability between USDC on Ethereum, Solana, Base, and other supported chains and USDCx on Aleo—without relying on traditional bridges that have been repeatedly exploited.

“Today we’re delivering something the industry has talked about for years but never quite achieved: true cash-like privacy for digital dollars that institutions and regulators can actually trust,” said Howard Wu, co-founder of Aleo. “USDCx proves you don’t have to choose between privacy and compliance.”

Key use cases highlighted at launch include:

  • Confidential global payroll and contractor payments that never expose salary data
  • Secure aid and humanitarian distributions in high-risk regions without endangering recipients
  • Private cross-border remittances that reveal nothing to surveillance firms
  • Truly private e-commerce and merchant settlements that protect pricing strategies and customer histories
  • DeFi applications with full user privacy while still accessing global USDC liquidity

Perhaps most significantly, Aleo’s zero-knowledge architecture allows users and institutions to generate cryptographic proofs of compliance (KYC, AML, tax reporting, etc.) without ever revealing underlying transaction details—a feature Circle and regulators have long sought in privacy technology.

Read More:
https://www.circle.com/blog/usdcx-on-aleo-testnet-via-circle-xreserve

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