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Researchers use zero-knowledge to address privacy, AML concerns in stablecoins

Published 12/15/2022, 05:30 PM
Updated 12/15/2022, 07:00 PM

Researchers from German crypto blockchain-based payments fintech etonec and other organizations have proposed using zero-knowledge proofs to ensure regulatory compliance and privacy in stablecoins. They have created a design that allows fiat-based stablecoins to be used like cash, within limits.

The researchers’ design allows a number of limits, including on transactions, balances and turnover, and enables Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) compliance with the use of zero-knowledge proofs, particularly zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge). Below the preset limits, transactions would be invisible to third parties.

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