This module is in active research and not finalized. Implementation details are subject to change.
Plasma is developing a compliant confidentiality-preserving transfer system for USD₮. The goal is to support confidential payments without introducing custom tokens, new wallets, or changes to core EVM behavior. This is not a full privacy chain. It is a lightweight, opt-in module designed to shield sensitive transfer data while remaining composable and auditable.

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Why Confidential Transfers Matter

Stablecoins are used for real-world financial activity: payroll, business transactions, settlements, and cross-border flows. But every onchain transfer is fully public, exposing balances, counterparties, and transaction details. This limits adoption in scenarios where confidentiality is essential or even required. Plasma’s confidential transfer system aims to enable:
  • Hidden transfer amounts and recipient addresses
  • Encrypted memos for reference data
  • Private balances that can be received or sent without exposure
  • Selective disclosures using verifiable proofs when needed

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What We’re Exploring

While the architecture is still under design, we are evaluating a pragmatic and modular approach built directly on Ethereum standards:
  • Stealth Address Transfers Transfers are sent to one-time stealth addresses derived from the recipient’s public key, shielding the destination from public view. Only the intended recipient can detect and claim the funds.
  • Encrypted Memos Optional encrypted metadata can be attached to each transfer. Only wallets with the correct viewing key can decrypt it.
  • Private ↔ Public Transfers Users can move USD₮ in and out of private flows using a native mechanism. No new tokens, wrappers, or bridges required.
  • Selective Disclosures For auditability or compliance, users may choose to disclose specific transactions using verifiable proofs. These are optional, scoped, and controlled by the user.

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Design Goals

This system is being developed with a few clear constraints:
  • EVM Native Implemented in standard Solidity. No new opcodes or execution environments.
  • Modular and Optional Opt-in at the contract and wallet level. Public transfers remain the default and require no change.
  • Composable with DeFi Confidential transfers must work alongside the broader Plasma ecosystem, not isolate funds in a separate privacy pool.
  • Regulatory Alignment Designed with auditability and optional disclosure in mind. The system should enable privacy without obstructing compliance.

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What’s Next

We are still evaluating technical tradeoffs across stealth address generation, indexing methods, encryption schemes, and proof mechanisms. The final design will prioritize pragmatic privacy, low integration burden, and future upgrade paths without overengineering or breaking compatibility. More technical detail will follow as the spec evolves.