Digital asset infrastructure provider Taurus has deployed a private contract for stablecoins designed to offer untraceability and anonymity.
Built on the Aztec Network, Taurus’ stablecoin contract combines zero-knowledge proofs with the compliance features of existing stablecoins, the company disclosed on Thursday. The new contract can increase adoption of stable assets for payrolls, intracompany payments and other sensitive transfers, it said.
Taurus provides infrastructure for major firms entering the digital asset space, including a global partnership with Deutsche Bank in 2023 and a management solution deal with State Street in 2024.
Taurus’ chief security officer, JP Aumasson, said the new product demonstrates how stablecoin users can preserve privacy without sacrificing compliance, ensuring accessibility for authorized parties like issuers and regulators.
Currently, “practical adoption” of stablecoins is limited by the visibility and immutability of public blockchains, said Arnaud Schenk, executive director of Aztek Network’s board.
Aztek’s zero-knowledge layer-2 provides “privacy for users and granular issuer-defined controls baked directly into the token,” said Schenk.
The new stablecoin contract launches amid growing speculation that increased government oversight will drive more users toward “dark stablecoins,” which are censorship-resistant alternatives.
“People who used stablecoins for big international transfers might start looking for censorship-resistant dark stablecoins instead,” said CryptoQuant CEO Ki Young Ju.
The Taurus contract may provide many of the privacy features of these so-called dark stablecoins, but without the potential regulatory risks.
Related: Bank lobby is ‘panicking’ about yield-bearing stablecoins
Stablecoin market could attract bigger players
The global stablecoin market has eclipsed $260 billion, offering a bridge between traditional finance and the digital asset world. Tether’s USDt (USDT) and Circle’s USDC (USDC) account for the lion’s share of the market, though more competitors are entering the fray.
According to RedStone’s latest report on tokenized real-world assets, at least 30 stablecoin issuers maintain a circulating supply of at least $100 million.
Stablecoin adoption is expected to be fueled by the passing of the GENIUS Act in the United States, which recently cleared a major legislative hurdle in the Senate. As Coinpectra reported, the GENIUS Act could open the door to Big Tech companies like Meta Platforms to issue their own stablecoins.
Elsewhere, the European Commission has adopted a more lenient stance on stablecoins, stating that risks related to issuance outside of Europe are manageable under the region’s Markets in Crypto-Assets (MiCA) framework.
Related: BIS says stablecoins fail as money, calls for strict limits on their role