Coinbase is working to add private transactions to its layer 2 network Base, CEO Brian Armstrong said in a post on X, adding more details will be shared in the near future.
Armstrong’s said Coinbase’s March 2025 acquisition of the team behind Iron Fish, a blockchain project known for building privacy-preserving technologies, was part of the move into private transactions.
That team was folded into a new “privacy pod” within Base. While the Iron Fish blockchain and its token remained independent, the engineers who developed it are now working to create what the firm called “privacy-preserving primitives” for Base.
“Privacy is critical for unlocking the full potential of an onchain future,” Coinbase wrote in its original announcement.
Armstrong’s post comes at a time in which interest in privacy coins is climbing again after these faced crackdowns worldwide. Privacy-focused tokens like , , and have surged this year, with ZEC alone moving up 460% in the past 30 days.
Privacy coins have faced crackdowns over concerns surrounding their potential use for illicit activities as tracing funds on their networks becomes harder, if not impossible.
Regulators in the EU and U.S. have responded to their popularity by tightening anti-money laundering (AML) and counter-terrorism financing (CTF) rules, resulting in bans and exchange delistings.
Research, however, shows that despite these concerns only around 7% of privacy coin transactions were tied to suspected illicit activity. Instead, data suggest that liquidity is instead the primer for a currency’s use in illicit transactions, with data from Chainalysis showing darknet market users went back to BTC after XMR was delisted from Binance.
The firm’s data also showed that only some 0.14% of all cryptocurrency transactions were involved in illicit activity.