• Crypto & Funx
• 24 Jul, 2024

Circle has unveiled its Confidential ERC-20 Framework co-authored by Inco Network to inspire developers to focus on creating privacy-centric blockchain applications.

The framework ensures that transactions can be conducted securely on blockchain, allowing businesses to maintain confidentiality and protect sensitive information. .

whitepaper titled “Confidential ERC-20 Framework” aims to improve the privacy of ERC-20 tokens on blockchains while complying with global regulatory standards. According to the on Monday, the framework will transform existing ERC-20 tokens into confidential wrapped versions directly on Ethereum Virtual Machines (EVM) networks.

Key Benefits of the Framework

Its goal is to conceal users’ balances and transaction amounts from unwanted scrutiny, providing additional privacy protections while maintaining compliance controls. The framework was co-authored by Circle Research, the research arm of the stablecoin issuer, and Inco Network, a decentralized network powered by Fully Homomorphic Encryption (

programmed directly into the application at the smart contract level.

Applications and Use Cases

The framework will be especially beneficial for businesses exploring blockchain solutions for employee payroll, supply chain vendor payments, and peer-to-peer (P2P) payments, where complete anonymity is required.

According to the announcement, the framework provides the architecture for legitimate users to maintain their privacy while implementing appropriate risk management controls to prevent misuse.

The whitepaper acknowledges that while “confidentiality” and “privacy” are crucial for businesses, these features can be exploited by bad actors if not properly managed. Consequently, Circle CEO Jeremy Allaire emphasized that regulated financial institutions—including banks and crypto companies—have a legal obligation to combat illegal activities such as money laundering.

The Circle boss stressed the importance of finding a balance between re