Paxos Labs and the Aleo Network Foundation have launched a U.S. dollar-backed stablecoin on the Aleo blockchain. The companies aim to combine regulated digital money with privacy-preserving infrastructure at the base layer of a public network.
The stablecoin, named as USAD, is now live on Aleo’s mainnet and is being positioned as the first U.S. dollar stablecoin issued directly on a layer-1 blockchain designed around zero-knowledge cryptography. The technology allows transactions to be verified without publicly revealing details such as user identities or transferred amounts.
Developed by Paxos Labs in partnership with the Aleo Network Foundation, USAD is intended to support programmable payments and financial applications while limiting on-chain data exposure. This is in contrast to most major stablecoins, which operate on transparent networks such as Ethereum or Tron.
“Stablecoins have already changed how financial markets operate, and we are still early in what they can enable. Working with Aleo, we are bringing digital dollars into an environment where privacy and programmability are built in from the start, giving enterprises a way to embed money they can trust,” Co-Founder and Head of Paxos Labs, Bhaumik Kotecha, said in statement shared with AlexaBlockchain.
The launch comes as stablecoins continue to gain traction in cross-border payments, treasury management, and decentralized finance, even as regulators in the U.S. and Europe move to tighten oversight. Dollar-linked tokens now account for the majority of activity in crypto-based payments and settlement, with issuers increasingly seeking regulatory clarity and institutional adoption.
USAD runs on the Aleo blockchain, developed by Aleo, which uses zero-knowledge proofs to enable private smart contracts. While privacy features have long been promoted as a competitive advantage, they have also raised concerns among policymakers about illicit finance and compliance.
Paxos Labs said the design of USAD aims to balance confidentiality with regulatory requirements by allowing selective disclosure and auditability. The company has previously worked on regulated digital asset infrastructure and tokenization tools for financial institutions and enterprises.
With the USAD stablecoin now live, developers and businesses can integrate USAD into payment systems and automated financial workflows that would be difficult to deploy on fully transparent blockchains. This could broaden blockchain adoption in sectors where transaction data is commercially sensitive, including supply chains, payroll, and enterprise finance.
“Privacy has been one of the biggest blockers to blockchain adoption at scale,” said Leena Im, chief operating officer at the Aleo Network Foundation. “With USAD, we are showing that privacy and programmability can coexist in a stablecoin.”
The introduction of USAD also reflects a broader shift in the stablecoin market, where issuers are experimenting with custom assets tailored to specific platforms and use cases, rather than relying solely on widely used tokens such as Tether’s USDT or Circle’s USDC.
The launch of USAD highlights growing interest in privacy-enabled financial infrastructure at a time when both regulators and enterprises are scrutinizing how digital money operates.
The article “Paxos Labs Launches Privacy-First Stablecoin USAD on Aleo” was first published on AlexaBlockchain. Read the complete article here: https://alexablockchain.com/paxos-labs-launches-privacy-first-stablecoin-usad-on-aleo/
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