Polygon launches shielded USDT and USDC transfers

Polygon Labs announced on May 4, 2026, that it has launched shielded transfers for USDT and USDC in partnership with Hinkal. The feature is available to institutional and enterprise users and is accessed via a new Private Send option in supported wallets.

The Private Send toggle routes transfers through Hinkal’s privacy tooling at the wallet and smart-contract level. The system uses zero-knowledge proofs to conceal sender, recipient and amount on the public Polygon ledger. Polygon applies Know Your Transaction (KYT) screening to every shielded transfer so transactions remain subject to transaction-monitoring checks.

Polygon positions the capability for confidential vendor payments, treasury moves and other business transactions where revealing counterparties or amounts could cause market exposure. The company says the option is opt-in and intended for legitimate corporate use cases.

The rollout covers USDT and USDC on Polygon’s layer-2 network, which processes a substantial share of stablecoin volume on public chains. Polygon handles more than 35% of stablecoin transfers, and the company said the shielded option is designed to be a simple toggle rather than a complex setup. Polygon also cited lower gas costs on its L2 compared with settling similar operations on Ethereum mainnet.

Zero-knowledge proofs let a sender demonstrate the validity of a transfer without publishing its details. Polygon combines that concealment with KYT screening to allow selective disclosure to compliance tools while hiding data from public block explorers. The industry has shifted toward systems that support selective disclosure and monitoring rather than fully anonymous mixers.

Some Ethereum developers have proposed protocol-level privacy work, including EIP8182, which would integrate shielded transactions into the mainnet. Protocol-level changes would require consensus updates and longer development timelines. Deploying privacy on an L2 places the privacy layer above the public ledger and limits technical risk to the specific smart contracts and wallet integrations used for the feature.

Polygon described the rollout as an effort to make shielded transfers available for businesses that need confidentiality with transaction screening in place. The company said the feature is intended to be a standard capability for institutions considering blockchain payments.