Paxos Labs and The Aleo Network Foundation Partner to Launch USAD Stablecoin

The Aleo Network Foundation, the non-profit corporation that oversees the health of the Aleo Network, a privacy and compliance infrastructure that powers secure, programmable, worldwide payments, today announced a partnership with Paxos Labs, the enterprise infrastructure platform for embedded on-chain finance, from branded stablecoin creation to yield-on-stablecoins, integrating compliant money markets, and more. Together, they are launching USAD, the first U.S. dollar stablecoin issued on a layer 1 blockchain that combines smart contract capabilities with enhanced privacy, ensuring sensitive information such as participant identities and transaction amounts are kept confidential. 

The partnership brings Aleo’s zero-knowledge cryptography together with Paxos Labs’ issuance framework, backed by regulated institutional-grade assets to deliver a digital dollar that is secure and private by design. Unlike existing stablecoins, USAD encrypts transactions end-to-end, solving the privacy gap that has limited institutional adoption of blockchain-based financial infrastructure.

“Privacy is the missing link in blockchain adoption at scale, and with USAD we are proving it can exist in a programmable stablecoin,” said Leena Im, Chief Operating Officer at The Aleo Network Foundation. “By pairing Aleo’s technology with Paxos Labs’ issuance stack, we are taking a joint, front-door approach with enterprises to show that digital dollars can be both trusted and transparent to oversight while protecting user confidentiality.” 

“Stablecoins have proven to be one of the most powerful innovations in financial markets, and we are only scratching the surface of their potential,” said Bhau Kotecha. “Partnering with Aleo allows us to bring digital dollars into a new era where enterprises can embed money that is private, programmable, and trusted from the ground up.”

Stablecoin use continues to surge, with transaction volume reaching $27.6T in 2024, surpassing the combined annual volumes of Visa and MasterCard by more than 7%. This growth, combined with regulatory momentum from the passing of the Genius Act in July 2025, has given U.S. lawmakers a framework for stablecoin oversight and is pushing adoption further into the financial mainstream. 

Paxos Labs was incubated within Paxos, the leading regulated blockchain infrastructure and tokenization platform. The USAD launch builds on The Foundation’s role in the Global Dollar Network (GDN), a Paxos-founded consortium that distributes USDG and furthers recent partnership momentum with Binance Alpha, Revolut, Worldpay and Request Finance,