Circle, in collaboration with Inco Network, has announced a groundbreaking development in blockchain technology that could reshape the landscape of digital asset privacy. The companies released a whitepaper detailing their “Confidential ERC-20 Framework,” a pioneering solution that enables private cryptocurrency transactions while maintaining regulatory compliance.
The framework, announced today, introduces a novel approach to handling ERC-20 tokens by implementing privacy features that mask both balance information and transaction amounts. This development marks a significant leap forward in addressing one of cryptocurrency’s most pressing challenges: balancing privacy with regulatory requirements.
“This framework represents a major milestone in blockchain technology,” said a spokesperson familiar with the project. “It’s the first comprehensive solution that successfully combines transaction privacy with regulatory compliance on EVM chains.”
Key Technical Innovations:
- Implementation of Fully Homomorphic Encryption (FHE) within the Ethereum Virtual Machine (EVM)
- Encrypted balance systems with selective visibility
- Confidential transfer mechanisms
- Programmable compliance controls
The technology allows existing tokens to be wrapped into confidential versions, opening new possibilities for various applications, from corporate payroll systems to supply chain payments. Notably, the framework includes built-in features for regulatory oversight, allowing authorized parties such as auditors and regulators to access transaction data when necessary.
