The Aleo Foundation today announced a partnership with Paxos Labs. The Aleo Network Foundation is a non-profit organization responsible for overseeing the health of the Aleo network, which serves as a privacy-focused and compliant infrastructure supporting secure, programmable payments globally. Paxos Labs is a platform providing enterprise-grade infrastructure for embedded on-chain finance, covering areas such as brand stablecoin creation, stablecoin yield generation, and compliant money market integration.
The two parties will jointly launch USAD, the first dollar stablecoin issued on a Layer 1 blockchain with smart contract capabilities, enhancing privacy protection to ensure that sensitive information such as participant identities and transaction amounts remains confidential.
This collaboration combines Aleo's zero-knowledge cryptography technology with Paxos Labs' issuance framework, utilizing regulated institutional-grade assets as support, aiming to create a digital dollar designed for both security and privacy. Unlike existing stablecoins, USAD encrypts transactions end-to-end, addressing the challenges that privacy concerns pose to institutional adoption of blockchain financial infrastructure.
Leena Im, Chief Operating Officer of the Aleo Foundation, stated: “Privacy is the missing key to the large-scale application of blockchain technology. With USAD, we are proving that programmable stablecoins can also achieve privacy protection. By combining Aleo's technology with Paxos Labs' issuance stack, we are working proactively with enterprises to demonstrate that a digital dollar can gain regulatory trust and maintain transparency while also protecting user confidentiality.”
Bhau Kotecha of Paxos Labs said: “Stablecoins have proven to be one of the most powerful innovations in financial markets, and we are only scratching the surface of their potential. Our collaboration with Aleo allows us to bring the digital dollar into a new era where enterprises can embed currency that is designed from the ground up to have privacy, programmability, and trustworthiness.”
The usage of stablecoins continues to surge, with transaction volumes reaching USD 27.6 trillion in 2024, exceeding the total annual transaction volume of Visa and Mastercard by over 7%. This growth momentum, coupled with the regulatory impetus from the passage of the Genius Act in July 2025, provides U.S. lawmakers with a regulatory framework for stablecoins and further drives their integration into the financial mainstream.
Paxos Labs is incubated from the leading regulated blockchain infrastructure and tokenization platform Paxos. The launch of USAD builds on the role of the Aleo Foundation in the Global Dollar Network (GDN). GDN is an alliance founded by Paxos responsible for distributing USDG and has further propelled recent collaborations with Binance Alpha, Revolut, Worldpay, and Request Finance.
About the Foundation and Aleo Network
Aleo Network is a privacy-first infrastructure layer designed for digital payments. Driven by zero-knowledge cryptography, Aleo combines end-to-end encryption with the programmability of smart contracts, bringing privacy, compliance, and scalability to stablecoins and blockchain-based financial systems.
The foundation is headquartered in the United States and has received support from top investors including a16z, SoftBank, and Coinbase Ventures, focusing on advancing the development of the next generation of secure on-chain financial infrastructure.
Contact: aleo@sutherlandgold.com
About Paxos Labs
Paxos Labs is a platform providing enterprise-grade infrastructure for brand stablecoins and embedded on-chain financial products. With over USD 120 billion in track record and regulatory expertise in tokenization, Paxos Labs enables fintech companies, banks, and trading markets to issue their own branded stablecoins, integrate compliant yield products, and embed lending services directly into their platforms.
Contact: press@paxoslabs.com
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