Circle freezes $12.6M of USDC linked to privacy protocol Zama
Stablecoin issuer Circle froze $12.6 million in USDC dollar-pegged tokens linked to privacy protocol Zama’s confidential USDC smart contract on Saturday, according to onchain sleuth ZachXBT.
Personal Opinion
In their head, users balance the risks of having their money frozen, potentially indefinitely, against the benefits of trading in and out of a stable currency without needing a bank. Everyone takes that risk when the smart contracts are in someone else’s control.
In contrast, stable coins like LUSD can not be frozen or confiscated. They are backed by Ethereum as collateral and the price is fully maintained via an oracle. LUSD was also more stable when USDC de-pegged.
There are also private stablecoins like Nephrite on the beam privacy chain, it operates very similarly to LUSD except, of course, transfers are entirely silent and invisible.
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