Aleo, a privacy-first blockchain infrastructure, has launched USDCx, a USDC-backed stablecoin, on its testnet to enable confidential digital dollar transactions using zero-knowledge proofs.

The stablecoin deployment utilizes Circle’s xReserve infrastructure, which allows blockchain teams to launch USDC-backed assets with cross-chain interoperability. USDCx maintains full USDC backing without relying on third-party bridges.

Aleo uses zero-knowledge proofs to enable confidential transactions without exposing sensitive data on public ledgers. The integration supports privacy-preserving use cases including global payroll and peer-to-peer payments.

Circle’s xReserve serves as interoperability infrastructure for blockchain teams to deploy USDC-backed stablecoins with seamless value transfer across supported networks. The collaboration provides trust-minimized interoperability and configurable compliance features.

The testnet launch targets sectors such as e-commerce and DeFi by offering privacy-by-design functionality that allows compliance verification without revealing sensitive transaction details on public ledgers.