Ethereum scaling solution Polygon has launched private stablecoin payments in an effort to attract more businesses and institutions to the chain.
In a statement on Sunday, Polygon introduced its new wallet feature that enables users to privately route transactions through a shielded pool, with verification handled by zero-knowledge proofs. The move is part of an integration with privacy protocol Hinkal.
“For onchain payments to go mainstream, businesses need privacy. Not ‘hide from regulators’ privacy. Operational privacy,” noted Polygon community lead Smokey on X.
Privacy was one of the biggest crypto themes in 2025, with many crypto assets tied to privacy projects surging last year despite a broader market downturn. Polygon highlighted the importance of privacy, arguing that many institutions are unlikely to move significant volume onchain without it.
“Confidentiality has been the single biggest gap between onchain rails and what institutional finance actually needs to move serious stablecoin volume,” Polygon said.
“Banks, treasuries and payments teams already live with confidentiality on traditional rails. They won’t move operational flows onto a ledger that broadcasts every counterparty and every amount to every observer on the network.”
Payment process for private transactions vs normal transactions. Source: Polygon
Polygon’s new feature is that it enables users to hide transactions from the public while maintaining compliance and auditability. Polygon said that “privacy means opacity to the market, not opacity to regulators.”
This happens in two key ways. First, every private transaction on Polygon “passes through KYT (Know Your Transaction) screening before execution.” Meanwhile, Hinkal’s documentation indicates that users can generate audit files to hand over to tax officials or regulators.
The move from Polygon comes just weeks after layer-1 blockchain Aptos made its own privacy play by launching the Confidential APT coin on April 24.
The coin is pegged to the value of the Aptos (APT) token and uses zero-knowledge proofs to conceal and verify transfer information.
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The total market capitalization of stablecoins on Polygon hit an all-time high of $3.6 billion on April 10, according to data from DefiLlama, making it the eighth-largest stablecoin chain.
US passage of the stablecoin-friendly GENIUS Act in July last year sparked an uptick in interest and trading volume for the asset class. On Sunday, Western Union became the latest traditional finance firm to launch a stablecoin through its USD-pegged USDPT on Solana.
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