Paxos and Aleo Launch USAD Stablecoin on Mainnet
Paxos Labs, in partnership with the Aleo Network Foundation, has deployed the USAD stablecoin on the Aleo mainnet. The launch expands the ecosystem of regulated stablecoins available on different blockchains. Aleo is a privacy-focused network, suggesting USAD may be positioned for use cases requiring enhanced confidentiality.
- Aleo utilizes zero-knowledge cryptography, which allows USAD transactions to obscure details like participant identities, wallet addresses, and transaction amounts from public view while still being auditable for regulatory compliance. This "privacy-by-default" approach is a core feature of the Aleo Layer 1 blockchain. - The launch of USAD on Aleo follows Circle's January 2026 debut of USDCx, a privacy-focused version of its USDC stablecoin, on the same network. This indicates a growing trend of stablecoin issuers leveraging privacy-enhancing blockchains for institutional and enterprise use cases. - Potential applications for USAD on Aleo include confidential payroll, private B2B payments, and anonymous participation in decentralized finance (DeFi). For instance, Toku plans to launch a confidential payroll solution using USAD in the first quarter of this year, with a target of processing over $1 billion in volume. - Paxos Labs, the issuer of USAD, is a spin-off from Paxos, a blockchain infrastructure company chartered by the Office of the Comptroller of the Currency (OCC). Paxos has a history of issuing regulated stablecoins, including Pax Dollar (USDP) and formerly Binance USD (BUSD). - The Aleo network, which went live in September 2024, raised $200 million in a Series B funding round in 2022 at a $1.45 billion valuation. The round was co-led by SoftBank Vision Fund 2 and Kora Management, with participation from a16z, Coinbase Ventures, and Tiger Global. - Paxos is also a founding member of the Global Dollar Network (GDN), a consortium that includes Kraken, Robinhood, and OKX, aimed at promoting the responsible growth of digital dollars. The Aleo Network Foundation is also a participant in the GDN.
