The stablecoin market continues to evolve. This time, it’s about the launch of a new dollar token, created in partnership between an infrastructure company and a fund developing a blockchain using zero-knowledge proof (ZK) technologies.
Unlike traditional digital dollars, where transaction data is available to everyone, the new model focuses on privacy: information about addresses and amounts is hidden from public view, while the instrument still complies with current regulatory requirements.
A new stage for Paxos
For Paxos, the launch of USAD is not a debut in the world of stablecoins. The company is already known for PYUSD and Global Dollar (USDG). However, the new product opens up a completely different segment: digital dollars tailored to the needs of large financial organizations.
Aleo, as an L1 blockchain with ZK-proof support, provides full transaction encryption. For banks and corporations, this means the ability to use tokens in settlements without disclosing confidential data.
Political and regulatory background
The launch coincided with significant changes in the US. In 2025, President Donald Trump signed the GENIUS Act, which for the first time established federal rules for stablecoin issuers. Thus, digital dollars received a clear legal status.
This event stimulated institutional interest: large companies are increasingly considering blockchain as a tool for real settlements, provided regulatory requirements are met.
Against this backdrop, USAD appears to be a product that fits perfectly into the new model — private, programmable, and regulated digital money.
Privacy as a competitive advantage
The key feature of the new token is data protection. Unlike traditional stablecoins, where transfer information is available to all network participants, Aleo allows transaction details to be hidden. For businesses, this is critically important: transactions can be conducted without fear of disclosing corporate information and sensitive data about counterparties.
The co-founder of Paxos Labs noted:
“Stablecoins have already proven to be one of the most significant innovations in the financial industry. USAD takes the next step and opens a new era of digital dollars — private, programmable, and reliable.”
Support from venture funds
The project has received a solid investment base. Among the partners are a16z, Coinbase, and SoftBank. For Aleo, this is a logical continuation of work on cryptographic solutions that enable confidential transfers while maintaining regulatory oversight.
The COO of Aleo emphasized:
“Privacy has long been the missing element for mass blockchain adoption. With USAD, we show that security and transparency can exist in one product.”
Potential market impact
Today, the stablecoin market is almost entirely divided between USDT and USDC. However, USAD may find its own niche. Its main audience is banks, institutional investors, and corporations for whom transaction data protection is crucial.
If the product gains recognition in this sector, it could become the first mass “corporate stablecoin” and set a trend for the issuance of private digital dollars.
What’s next?
For Aleo, this is a chance to prove the effectiveness of zero-knowledge technologies in practice. For Paxos, it’s an opportunity to strengthen its leadership among stablecoin issuers and enter the institutional settlements segment. And for the entire market, it’s a signal that the next stage of digital currency development is not only about scaling, but also about data protection and user privacy.
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