Last month, Aleo published a whitepaper called Stablecoin Privacy, co-authored by its policy chief Yaya Fanusie, cryptographer Matthew Green, and policy expert Valerie-Leila Jaber. You should read it. Not because it's about Aleo (they're a friendly competitor). But because it’s authored by an interesting group. Yaya used to be a CIA analyst. Green, a professor at Johns Hopkins, and one of the creators of Zcash. Jaber is a board member at the Crypto Council for Innovation and a former Global Head of Financial Crime Compliance at Coinbase.
The opening is familiar to anyone who’s been following financial privacy (or any reader of this newsletter). The 2025 GENIUS Act will very likely lead to huge growth in stablecoin volumes. But there’s a catch: public blockchains broadcasting every transaction to the world. That's not a feature institutions or any serious company using stablecoins can live with. It's the reason $300 billion of stablecoins are mostly currently doing trading flows, but not business operations like payroll, vendor payments, or settlements.
Privacy is something we want for “values” reasons. It’s a human right. But it’s also part of a market-structure debate. As Aleo’s report notes, the U.S. Treasury has said that consumers have legitimate reasons to want blockchain privacy tools. a16z's 2026 trends outlook puts privacy-preserving proofs at the center of institutional adoption. Polygon shipped confidential stablecoin transfers this Spring. Zcash's shielded supply jumped 25% last year even as exchanges delisted its peers, like Monero. And so on. There’s no shortage of data showing the need for privacy. There’s increasing acceptance that privacy is a public good, not an excuse for secrecy and harm.
When competing zero-knowledge chains, the government, and the industry's biggest investors all converge on the same diagnosis, you're no longer watching companies argue for their product. You're watching an industry agree on its missing layer. The real question is what solutions the industry will take as standards.
The Aleo paper's most useful contribution is its honesty about the alternatives. Mixers attract exactly the users who get them sanctioned. Privacy coins work but many of them are being delisted. Permissioned "walled gardens" trade liquidity (and a blockchain’s permissionlessness) for comfort.
The paper's answer (Miden’s answer by the way) is programmable privacy with built-in risk controls: encrypted transactions that a designated risk manager can still monitor, freeze lists enforced in the code itself, controlled entry and exit points. Their closing analogy is one we'd endorse: HTTPS didn't just make the internet more secure, it made internet commerce possible. Privacy infrastructure does the same for on-chain money.
Where the interesting debate begins is what sort of privacy. Every architecture makes choices, and the choices are compounding for most future design choices. Where the rubber meets road is in questions such as: Who holds the view keys: the user, the issuer, or a designated third party watching every flow? Is compliance something bolted on above the protocol, or proven within it? What happens at the edges of the system, where an exit through a decentralized exchange can quietly undo the accountability the entry checks were built to guarantee?
These aren't implementation details. They're the difference between privacy from the crowd and privacy with a chaperone. And institutions will read those tradeoffs closely before deciding which rails to trust.
Fittingly, I'm sitting down with Yaya Fanusie himself for the Privacy Podcast this week to press on exactly those questions. Episode coming soon. Watch this space.
Privacy Roundup
EthSystems launched as an independent, for-profit company to turn the Ethereum Foundation’s privacy research into products for financial institutions, spanning confidential stablecoin transfers, crosschain settlement and privacy-preserving identity.
Project Eleven and Jim Posen built a zero-knowledge proof that uses a wallet’s BIP-32 derivation history to verify its legitimate owner without revealing higher-level key material, while authorizing migration to a post-quantum address.
Symbiosis launched Private Swaps and Private Send on TRON, allowing users to move stablecoins and other tokens privately across networks or directly to another address.
Gordon Liao on Privacy Podcast
On the latest episode of the Privacy Podcast, Ben Schiller speaks with Gordon Liao, Chief Economist and Head of Research at Circle, about the stablecoin revolution. Drawing on his experience at the Federal Reserve, the CFTC, Uniswap, and now Circle, Gordon explains why stablecoins are solving more than payment problems. They are also changing the balance sheet structure of finance by moving more activity from centralized intermediaries toward programmable systems that can hold and move value directly.
Privacy is a major theme in the conversation. Gordon argues that institutions need confidentiality before they can fully trust blockchain infrastructure, but public blockchains still create value through transparency, verifiability, and market coordination. The challenge is designing systems where public and private states can coexist.
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Till next time.