According to engineer-founder Aptos Labs Sherry Xiao, the tool addresses the longstanding issue of choosing between user privacy and the transparency required for regulatory compliance.
Confidential APT was launched on the Aptos mainnet on Friday after nearly unanimous approval of the corresponding proposal. It uses zero-knowledge proof, allowing balances and transfer amounts to be hidden, while transactions themselves remain verifiable.
Although blockchains provide a level of transparency not found in traditional systems, it is the lack of privacy that has long held back mass adoption. The main issue is the risk of exposing sensitive financial information.
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In an interview, Xiao emphasized that Confidential APT, pegged to Aptos (APT) at a 1:1 ratio, reduces the risks of wallet analysis and targeted attacks:
“Portfolio tracking, pressure due to public assets, personal security issues — these are all real problems users face today.”
Confidential APT Can Hide Salaries and Business Strategies
According to Xiao, the new token solves a specific problem faced by companies.
If a business pays salaries through a blockchain with open amounts, this data becomes public forever, visible to colleagues, competitors, recruiters, and other market participants.
The same applies to fund movements, settlements, and trading strategies. For this reason, the lack of privacy in blockchain becomes a critical limitation for many companies.
At the same time, Confidential APT eliminates this risk by allowing financial data to be hidden.
Backdoor Access Feature for Investigations
Xiao emphasized that Confidential APT remains compatible with KYC and AML requirements. In the event of an investigation or request from regulators, access to data can be obtained via special auditor keys.
Such keys can only be activated after approval through on-chain voting:
“This approach allows data, such as transfer amounts, to be disclosed for investigations when necessary, while by default preserving user privacy.”
At the same time, Confidential APT hides balances and transaction amounts, but does not make the network fully anonymous. Wallet addresses and the fact of transactions remain open, which distinguishes it from solutions like Monero.
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Xiao expects that private users will adopt the tool more quickly at first. For businesses, the process will be slower due to the need to integrate it into reporting and regulatory compliance.
If no problems arise on the mainnet over several months and there is volume, this could accelerate business interest.
