Coinbase CEO Brian Armstrong stated that his team is working towards achieving private stablecoin transactions on the Ethereum Layer 2 network Base, which could bring much-needed privacy enhancements to public blockchains.
"Base is building privacy transactions," Armstrong said in a post on the X platform released on Tuesday, noting that Coinbase acquired the crypto privacy platform Iron Fish in March to fulfill this mission.
Many respondents inquired whether the privacy solutions would mandate Know Your Customer (KYC) checks; however, Armstrong did not address these concerns, stating that more details would be shared soon.
Some individuals seek privacy-protecting crypto transactions because these transactions safeguard users' financial data, shield transactions from public scrutiny, and reduce the risk of being targeted by hackers or scammers.
However, some leading privacy innovators in the crypto industry have faced intense lawsuits, including Tornado Cash developers Alexey Pertsev and Roman Storm, as well as Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill.
Nevertheless, if Base's transactions are based on Iron Fish's current implementation, they may not be entirely private.
According to Iron Fish's website, the platform uses zero-knowledge proofs and "viewing keys" to keep transactions private while still allowing data disclosure when requested by tax authorities or other law enforcement agencies.
Users receive these viewing keys when creating an account on Iron Fish, allowing them to provide "read-only access" information when authorities come knocking.
Iron Fish's zero-knowledge proofs assist this effort by allowing users to prove certain things without revealing all information, disclosing only the necessary elements.
Iron Fish's crypto privacy solution utilizes the cross-chain bridge ChainPort, which also employs a real-time threat detection system to ensure that "only clean funds" enter the Iron Fish network.
Iron Fish has provided privacy solutions on over 20 blockchains, including Base, enabling a privacy version of wrapped USDC through ChainPort.
Related: The Federal Reserve considers launching a "streamlined" payment account to open channels for fintech and cryptocurrency companies.
Original article: “Coinbase CEO Reveals Base is Building 'Privacy Transactions' Feature”
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