📅 July 16, 2025 | New York, USA
A new chapter in the war for financial privacy on the blockchain has just been written: Privacy Pools, the privacy protocol using Zero-Knowledge Proofs (ZK) technology, announced today its integration with SKY's USDS stablecoin, marking its first expansion into multi-asset pools. The news, revealed by The Block, highlights that the on-chain privacy ecosystem is not only still alive, but is reinventing itself in the face of increasingly stringent regulations and constant surveillance by exchanges and governments.
Privacy Pools emerged as a direct response to the void left by Tornado Cash after its sanctions in the US and Europe. Its proposal: to allow anonymous transactions without sacrificing regulatory compliance, using ZK proofs to demonstrate that the funds are not derived from illicit activities, without revealing the user's identity or exact history.
Until now, Privacy Pools only supported ETH as a base asset. But today it takes a key step by integrating USDS, SKY's stablecoin, which in just a few months has gained popularity as a low-cost alternative for stable and fast payments, especially in emerging markets.
The merger of Privacy Pools and USDS means that users will be able to deposit and mix stablecoins with the same privacy technology they already use for ETH, greatly expanding the protocol's appeal to traders, businesses, and citizens who need to protect the confidentiality of their finances without breaking the law.
What changes with multi-asset pools? According to The Block, the Privacy Pools team plans to expand its architecture to more tokenized assets: stablecoins, wrapped BTC, DeFi tokens, and even NFTs. The key lies in its ZK engine, which allows for proof of liquidity and compliance without exposing real identity, something that until recently seemed impossible.
For SKY, owner of USDS, this partnership is a masterstroke: its stablecoin not only gains liquidity within a privacy-focused ecosystem, but also positions itself as a privacy-friendly option for institutional and retail users tired of the extreme exposure of their on-chain transactions.
Advocates applaud the integration as a step toward a more balanced Web 3, where privacy and legal compliance don't have to be enemies. But critics fear that tools like Privacy Pools will end up replicating the problems of Tornado Cash: hackers, ransomware, and illicit capital could attempt to abuse the system. To mitigate this, Privacy Pools includes lists of blocked addresses, external audits, and a reporting system, aiming to demonstrate that privacy doesn't mean impunity.
Topic Opinion:
I see Privacy Pools as a fascinating experiment: balancing privacy and legality in crypto is one of the biggest challenges of this decade. And ZK technology may be the only realistic way to achieve it. Integrating a stablecoin like USDS demonstrates that financial privacy doesn't have to be limited to ETH or Bitcoin, but can expand to more "serious" and stable assets that attract real users, not just anonymous maximalists.
The challenge is clear: keep the protocol safe from abuse without betraying its privacy DNA. If they succeed, Privacy Pools could set the standard for how private and auditable transactions will be made simultaneously in the next wave of Web3.
💬Do you think Privacy Pools with ZK and stablecoins are the logical evolution of crypto privacy?
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