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Ethereum scaling network Polygon has launched a private payments feature for stablecoin transactions, targeting businesses and financial institutions that require confidentiality on public blockchains.
The feature, announced Sunday, allows users to route payments through a shielded pool with transaction verification handled byzero-knowledge proofs. It is built through an integration with privacy protocol Hinkal and is accessible
The system conceals sender identities, recipient addresses, and transaction amounts from public view while retaining compliance functionality. Every private transaction passes through Know Your Transaction (KYT) screening before execution, and users can generate audit files for submission to tax authorities or regulators. “Privacy means opacity to the market, not opacity to regulators,” Polygon said.
Polygon community lead Smokey described the move on X as addressing a core institutional requirement. “For on-chain payments to go mainstream, businesses need privacy. Not ‘hide from regulators’ privacy. Operational privacy,” he said.
Polygon said confidentiality has been the primary gap preventing institutions from moving significant stablecoin volumeon-chain. Banks, treasury teams, and payments operations are accustomed to confidential settlement on traditional rails and are unlikely to route operational flows onto a ledger that exposes counterparties and amounts to all network participants.
The totalmarket capitalization of stablecoins on Polygon reached an all-time high of $3.6 billion on April 10, according to DefiLlama data, placing it eighth among all stablecoin chains. The US passage of the stablecoin-friendly GENIUS Act in July last year contributed to increased interest and trading volume across the crypto asset class.
The Polygon launch follows a similar move by layer-1 blockchain Aptos, which introduced its Confidential APT coin on April 24. That token is pegged to the value of the Aptos (APT) token and also uses zero-knowledge proofs to obscure transfer details.
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