Circle Launches Privacy-Centric USDCx Stablecoin on Aleo's Testnet
Circle and Aleo have announced the launch of USDCx on Aleo's testnet, a privacy-focused, interoperable USDC-backed stablecoin built via the xReserve platform. USDCx is designed to safeguard sensitive data such as transaction histories while maintaining regulatory compliance. The mainnet launch of USDCx is expected by the end of January 2026.
This initiative marks Aleo as the second blockchain partner for Circle's USDCx, following last week's launch on the Canton blockchain as part of the xReserve rollout. The xReserve platform enables multiple blockchains to issue USDC-backed stablecoins that interoperate seamlessly with native USDC, thereby unifying liquidity and simplifying user experience.
Aleo, which raised $28 million in 2021 from investors including a16z and Coinbase Ventures, is leveraging zero-knowledge proofs to develop this privacy technology. Circle's broader strategy includes building an Arc layer-1 network for stablecoins and expanding USDC’s market presence, with current USDC circulation exceeding $78 billion.
USDCx’s targeted use cases include private payroll and remittance payments that protect users' income and spending data from exposure. This development comes amid growing demand for confidential payments infrastructure and cross-chain stablecoin interoperability. Notably, Circle-related stocks (such as CRCL) have seen a rise of about 6% in the market following this announcement.
