Circle unveils encrypted ERC-20 framework to enhance blockchain privacy
Inco Network and Circle Research launched the Confidential ERC-20 Framework, designed to enhance privacy on public blockchains while ensuring regulatory compliance. The framework transforms standard ERC-20 tokens into encrypted versions, concealing transaction amounts and balances. It employs Fully Homomorphic Encryption (FHE) to protect transaction data on Ethereum while allowing operations on encrypted data within the Ethereum Virtual Machine (EVM). This approach enables regulated financial institutions to maintain privacy while fulfilling anti-money laundering obligations. Authorized parties can access transaction details selectively, enhancing oversight without compromising user confidentiality. The framework supports applications in payroll, supply chain management, and peer-to-peer payments, embedding compliance measures in smart contracts. It is open-source, promoting innovation in privacy-focused decentralized finance.
