Coinbase to Introduce Private Stablecoin Transactions on Base Layer-2 Network
Coinbase is preparing to enable private stablecoin transactions on its Ethereum Layer-2 network, Base. This initiative, announced by CEO Brian Armstrong, aims to enhance privacy on public blockchains, where all transactions are typically visible.
Armstrong revealed the development in an X post, stating, "Base is building private transactions." He further explained that Coinbase's prior acquisition of Iron Fish, a cryptocurrency privacy platform, was a strategic step toward this goal.
Base is building private transactions.
We acquired the Iron Fish team back in Mar 2025 to start working on this. More to share soon. https://t.co/ZzRHZRH9yN
— Brian Armstrong (@brian_armstrong) October 21, 2025
While Armstrong did not specify whether the new feature would necessitate Know Your Customer (KYC) checks, he indicated that additional details would be forthcoming.
The Importance of Privacy in Cryptocurrency
Privacy has historically been a complex issue within the cryptocurrency space. Many users desire the ability to maintain the confidentiality of their financial data and protect themselves from potential threats like hackers or scammers. Despite the transparency offered by public blockchains, they unfortunately allow for the tracking of wallet activities by anyone.
Concurrently, regulatory bodies have intensified their scrutiny of privacy tools associated with illicit activities. Legal actions against developers of Tornado Cash and Samourai Wallet have raised significant questions regarding the compatibility of privacy features with regulatory frameworks.
Understanding Iron Fish's Technology
Iron Fish utilizes zero-knowledge proofs (ZK-proofs) and a mechanism called "view keys" to provide users with privacy. This technology also allows for the selective sharing of transaction data when necessary. A view key grants permission to specific parties, such as tax authorities, to access transaction details without revealing all information to the public.
We’re incredibly proud of all that we’ve built:
👉 L1 PoW with custom algo (Fish Hash)
👉 Encrypted transactions via ZKPs
👉 First privacy L1 to ship Multi-Asset Shielded Pool (MASP)
👉 First L1 to have private multisig wallets via FROST DKG
👉 First to have Ledger…— Iron Fish (@ironfishcrypto) March 6, 2025
The Iron Fish system also integrates with ChainPort, a bridge equipped with real-time threat detection capabilities designed to block suspicious funds. This platform already supports private transactions across more than 20 blockchains, including Base, and offers a private version of wrapped USDC.
And now we’re excited to bring our privacy expertise to Base’s rapidly growing ecosystem to accelerate economic freedom through privacy at scale.
Base is uniquely positioned to onboard millions, and we want to ensure privacy will be the standard, not the exception. pic.twitter.com/FkDFAmAsUY
— Iron Fish (@ironfishcrypto) March 6, 2025
By incorporating Iron Fish's privacy solutions into Base, Coinbase has the potential to establish a balance between privacy and accountability. If this integration proves successful, Base could emerge as a leading privacy layer within the cryptocurrency ecosystem, known for both its security and compliance.