Coinbase CEO Teases Private Stablecoin Transactions on Ethereum Layer-2 Base

Armstrong Confirms Base’s Privacy Roadmap

In a post shared on X, Armstrong said that “Base is building private transactions,” confirming that Coinbase’s earlier acquisition of the crypto privacy platform Iron Fish in March was a strategic step toward that goal. The move signals Coinbase’s growing focus on privacy infrastructure at a time when blockchain transparency is often seen as both a feature and a liability.

While many users welcomed the idea, others questioned whether privacy features would require Know Your Customer (KYC) checks. Armstrong didn’t clarify that aspect but said more details will be released soon, suggesting that compliance and usability will likely be balanced carefully in the final rollout.

Privacy Without Total Anonymity

Although the initiative promises greater confidentiality, it’s unlikely that Base transactions will be completely private. Iron Fish, whose technology is expected to underpin the new privacy layer, already uses zero-knowledge proofs and a “view key” system. This setup lets users keep transaction details hidden while still allowing authorities or auditors to verify data when necessary.

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

Iron Fish’s approach differs from earlier privacy tools like Tornado Cash or Samourai Wallet, whose developers have faced aggressive legal actions from regulators. Instead of full anonymity, Iron Fish offers what could be described as “regulated privacy,” ensuring users can protect their information without violating financial oversight laws.

The system relies on zero-knowledge proofs to validate transactions without disclosing all details, alongside view keys that grant read-only access to specific data. This compromise could allow Base to adopt privacy features while remaining compliant with global financial regulations – a crucial factor for a company as closely scrutinized as Coinbase.

Iron Fish’s Network Expands Across Chains

Iron Fish’s technology already supports privacy-enabled transactions across more than 20 blockchains, including Base. Through ChainPort, a cross-chain bridge with real-time threat detection, Iron Fish helps ensure that “only clean funds” enter its ecosystem. Among the supported assets is a privacy version of wrapped USDC, demonstrating how stablecoins could function in a more secure, user-controlled environment.

If successfully implemented, Base’s privacy layer could set a precedent for how mainstream crypto platforms handle sensitive data. Rather than pursuing total anonymity, Coinbase appears to be aiming for a balanced system that combines transparency with discretion – a middle ground that could bring blockchain privacy closer to mass adoption.