The Aleo Network Foundation, which oversees the Aleo Network, a privacy and compliance infrastructure for digital payments, has partnered with Paxos Labs, an enterprise infrastructure platform for embedded on-chain finance. The collaboration introduces USAD, a new U.
S. dollar stablecoin issued on a layer 1 blockchain that combines smart contract capabilities with enhanced privacy. This stablecoin is designed to ensure confidentiality for sensitive information, including participant identities and transaction amounts.
USAD integrates Aleo’s zero-knowledge cryptography with Paxos Labs’ issuance framework, which is backed by regulated institutional-grade assets. The design prioritizes security and privacy by encrypting transactions end-to-end. This approach aims to address the privacy limitations that have historically impacted institutional adoption of blockchain-based financial infrastructure.“Privacy is the missing link in blockchain adoption at scale, and with USAD we are proving it can exist in a programmable stablecoin,” stated Leena Im, Chief Operating Officer at The Aleo Network Foundation. “By pairing Aleo’s technology with Paxos Labs’ issuance stack, we are taking a joint, front-door approach with enterprises to show that digital dollars can be both trusted and transparent to oversight while protecting user confidentiality.”Bhau Kotecha, Co-founder at Paxos Labs, commented on the partnership, noting, “Partnering with Aleo allows us to bring digital dollars into a new era where enterprises can embed money that is private, programmable, and trusted from the ground up.” Kotecha also highlighted the broader impact of stablecoins, adding, “Stablecoins have proven to be one of the most powerful innovations in financial markets, and we are only scratching the surface of their potential.”The introduction of USAD occurs as stablecoin use continues to expand, with transaction volume reaching $27.6 trillion in 2024. This figure represents an increase of over 7% compared to the combined annual volumes of Visa and MasterCard. The market growth is also supported by regulatory developments, such as the passing of the Genius Act in July 2025, which provides a framework for stablecoin oversight in the U.
S. and facilitates broader financial adoption.
The Aleo Network Foundation, headquartered in the U.
S. and backed by investors including a16z, Softbank, and Coinbase Ventures, positions the Aleo Network as a privacy-first infrastructure layer for digital payments. It focuses on bringing privacy, compliance, and scalability to stablecoins and blockchain-based financial systems. The USAD launch builds on the Foundation’s involvement in the Global Dollar Network (GDN), a Paxos-founded consortium, and recent partnerships with entities such as Binance Alpha, Revolut, Worldpay, and Request Finance.
Paxos Labs operates as an enterprise-grade infrastructure platform for branded stablecoins and embedded on-chain financial products. Incubated within Paxos, a regulated blockchain infrastructure and tokenization platform, Paxos Labs leverages Paxos’ more than $120 billion track record in tokenization and regulatory expertise to enable financial institutions to issue branded stablecoins and integrate compliant yield and lending solutions.
