PLabs proposed a privacy stablecoin solution for Ethereum with a 1:1 reserve backing USDC

PLabs released a technical paper on October 9, proposing a privacy stablecoin protocol based on Ethereum. This protocol allows anyone to deploy a Reserve Vault and NotePool supported 1:1 by reserve ERC-20 tokens, generating pUSDC as an example. The user's first on-chain credit is a privacy note, without the need to hold public USDC beforehand.

The protocol separates the payer from the payee, mintage from becoming currency, and pre-minted notes can only circulate after an equivalent reserve is deposited in the same transaction. The circulating supply and reserve's 1:1 relationship is enforced by the contract, with ownership and transfers hidden on-chain. Only compliant administrators can execute freezes, and frozen reserves cannot be moved. The protocol is based on the Zcash Orchard note model, adopts the pERC20 standard, supports selective disclosure, and the security model covers abnormal scenarios involving operators, entry parties, and relayers.