Circle and Inco Network have announced the publication of a comprehensive whitepaper outlining the Confidential ERC-20 framework.
The new framework aims to bring advanced privacy features to blockchain transactions by transforming standard ERC-20 tokens into stealth-wrapped versions that hide user balances and transaction amounts.
The framework, co-authored by Circle Research and Inco Network, provides a privacy-focused solution that remains compliant with regulatory compliance. Leveraging Fully Homomorphic Encryption (FHE), the Confidential ERC-20 Framework enables private transactions on public Ethereum Virtual Machine (EVM)-compatible blockchains, ensuring users’ sensitive financial data is protected.
Key features of the new Confidential ERC-20 Framework are:
- Privacy-Enhanced Transactions: User balances and transaction amounts are hidden from public visibility, providing a layer of privacy.
- Encrypted Transfers: All transfer amounts between addresses are encrypted, ensuring that sensitive data remains private.
- Risk Management Capabilities: Rules can be programmed at the smart contract level for compliance measures such as anti-money laundering (AML) checks and transfer limits.
- Authorized Viewing Options: Certain parties, such as auditors and regulators, can be granted permission to view encrypted balances without exposing users’ privacy.
- Diverse Applications: The framework supports a range of use cases, from supply chain payments and payroll to peer-to-peer financial transactions.
*This is not investment advice.