Paxos Labs and the Aleo Network Foundation announced Wednesday they are launching USAD, a U.S. dollar-pegged stablecoin designed to preserve user privacy while appealing to financial institutions. The token is built on Aleo’s zero-knowledge layer 1 blockchain and issued through Paxos Labs, a regulated infrastructure provider incubated under Paxos, the company behind popular stablecoins including PayPal USD and the Global Dollar.
Stablecoins represent a fast-growing class of cryptocurrencies increasingly viewed as a cheaper, faster alternative for global money transfers. These tokens maintain prices tied to fiat currencies like the U.S. dollar and use blockchains to settle transactions. Interest in stablecoins has accelerated following President Donald Trump’s signing of the GENIUS Act, which established federal standards for stablecoin issuers.
Unlike conventional stablecoins such as Tether’s USDT and Circle’s USDC, Aleo’s stablecoin encrypts wallet addresses and transaction amounts, shielding them from public view. This design could appeal to financial institutions concerned about exposing sensitive transaction data on-chain.
“Stablecoins have proven to be one of the most powerful innovations in financial markets, and we are only scratching the surface,” said Bhau Kotecha of Paxos Labs. He added that USAD aims to “bring digital dollars into a new era where enterprises can embed money that is private, programmable and trusted from the ground up.
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