Polygon launches privacy stablecoin payment feature, targeting institutional markets

Deep Tide TechFlow News, May 5th, according to Cointelegraph reports, Ethereum scaling solution Polygon announced the launch of a privacy stablecoin payment feature on Sunday to attract more enterprises and institutions to use its network. This feature routes transactions through wallets to shielded pools and is verified by zero-knowledge proofs, as part of Polygon’s integration with the privacy protocol Hinkal.

Polygon community leader Smokey stated on the X platform that on-chain payments need privacy protection to become mainstream, not “privacy to evade regulation,” but “privacy at the operational level.” Polygon said, “Confidentiality is the biggest gap between on-chain trackability and the actual needs of institutional finance,” as banks, treasuries, and payment teams will not transfer operational flows to ledgers that broadcast transaction counterparties and amounts to every observer on the network.

The new feature hides transaction information from the market while maintaining compliance and auditability. Polygon pointed out that “privacy means market opacity, but not opacity to regulators.” Each private transaction is reviewed through “Know Your Transaction” (KYT) before execution, and Hinkal documentation shows that users can generate audit files to submit to tax authorities or regulators.

Polygon’s move follows Aptos’s launch of the privacy feature Confidential APT on April 24. According to DefiLlama data, the total market cap of stablecoins on Polygon hit a record high of $3.6 billion on April 10, making it the eighth-largest chain for stablecoins.