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Circle and Aleo Launch USDCx, a Privacy-Focused USDC Stablecoin, on Aleo Testnet

Built on Aleo’s zero-knowledge rails, the testnet token uses Circle’s xReserve for 1:1 USDC backing with a per-transaction record accessible on lawful request.

Overview

  • USDCx debuts as a testnet stablecoin that hides on-chain transaction details using zero-knowledge proofs on Aleo.
  • Public observers see transactions as unintelligible data, which Aleo’s Howard Wu describes as "banking-level privacy" rather than full anonymity.
  • Each transfer includes a compliance record that Circle can review if authorities seek information on specific transactions.
  • Circle’s xReserve infrastructure provides full USDC backing and cross-chain interoperability without relying on third-party bridges.
  • The project targets enterprise use cases such as payroll, e-commerce, DeFi, aid distribution, and peer-to-peer payments as traditional finance explores tokenization.