> ## Documentation Index
> Fetch the complete documentation index at: https://ryle.sh/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# What is the privacy problem of stablecoins?

> Stablecoins on public chains expose payroll, vendor payments, and account balances to anyone. Confidential stablecoins keep individual activity private while proving reserves to auditors.

The privacy problem of stablecoins is that, on a public chain, every holder balance and every payment is visible to anyone — exposing payroll, vendor relationships, and account balances to competitors, counterparties, and the public. A stablecoin meant for business payments becomes a live feed of who pays whom and how much. Confidential stablecoins fix this by keeping individual activity private while still letting issuers prove reserves and supply.

## Payroll and vendor exposure

Pay an employee or a supplier in a transparent stablecoin and the amount, timing, and recipient are public forever. Salaries, vendor terms, and payment cadence — information businesses treat as confidential — become trivially observable.

## Balance surveillance

Anyone can watch a company's or individual's stablecoin balance rise and fall. For a business, that exposes cash position and runway; for an individual, it is a privacy and safety risk.

## Regulatory tension

Issuers face a real tension: they must satisfy regulators and auditors (reserves, supply, sanctions screening) while not exposing every customer's activity to the world. Full transparency over-shares; full anonymity fails compliance.

## How confidential stablecoins solve it

A [confidential stablecoin](/docs/use-cases/stablecoins) encrypts balances and amounts while preserving verifiability, so payments stay private. [Selective disclosure](/docs/concepts/selective-disclosure) lets the issuer prove reserves to an auditor or report specific activity to a regulator without publishing holder data — resolving the regulatory tension instead of trading one failure for another.

## Related

* [Confidential stablecoins](/docs/use-cases/stablecoins)
* [Selective disclosure](/docs/concepts/selective-disclosure)
* [Why enterprises need privacy onchain](/docs/problems/enterprise-privacy-onchain)
* [What are confidential digital assets?](/docs/what-are-confidential-digital-assets)

## FAQ

<AccordionGroup>
  <Accordion title="Can a confidential stablecoin still prove its reserves?">
    Yes. Selective disclosure lets the issuer prove reserves and supply to auditors and regulators without revealing individual holder balances.
  </Accordion>

  <Accordion title="Who can see my confidential stablecoin balance?">
    By default, only you. Operators see aggregate health, not individual balances; external parties see only what an explicit, logged disclosure grants.
  </Accordion>
</AccordionGroup>