Stellar Private Payments Goes Open-Source, Changing Everything

Stellar open-sources its private payments system using Groth16 zero-knowledge proofs, reshaping how institutions handle compliant, shielded transactions in 2026.

Stellar just moved. Private payments, fully open-sourced. Zero-knowledge proofs, configurable compliance, shielded transfers built for real financial flows, not whitepaper experiments.

This is not a roadmap update. The code is live.

RektHQ on X confirmed the development, announcing a brand content series with @StellarOrg covering privacy infrastructure. First topic: Stellar’s X-Ray Protocol and the open-sourcing of Stellar Private Payments. As RektHQ posted on X, “configurable privacy is becoming the baseline for systems that expect to earn trust.”

The Code That Just Changed the Privacy Game

Stellar Private Payments brings shielded deposits, transfers, and withdrawals to the Stellar network. It runs on Groth16 zero-knowledge proofs. Browser-based proving runs client-side. Transactions stay confidential.

Compliance does not disappear. It works differently.

Association Set Providers, or ASPs, maintain membership and non-membership Merkle trees. Pool operators enforce anti-misuse safeguards through proof systems, not public surveillance. The transaction stays private. The compliance still holds.

That distinction is where most privacy systems fall apart. Stellar’s approach keeps both intact.

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X-Ray Protocol: Built to Filter, Not Hide

The X-Ray Protocol sits under all of it. It introduces BN254, an elliptic curve used across the zero-knowledge space, and Poseidon, a hash function built specifically for zero-knowledge proofs.

These are not end-user features. They’re foundational cryptographic components.

Without protocol-level support, developers work around privacy, patching it with custom cryptography, heavy off-chain logic, and compatibility code. That path increases cost, complexity, and risk. X-Ray cuts that out at the base layer.

As documented in the rekt.news research piece from February 23, 2026, the design philosophy is deliberate: privacy is opt-in, configurable, implemented at the application layer. A token can be confidential or not. A payment shielded or not. The network stays transparent by default.

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Why 2026 Is the Year This Stopped Being Optional

Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation, put the position plainly: “Openness and privacy aren’t mutually exclusive. In fact, we’re making privacy a priority.”

She’s not alone in saying it. Ethereum’s own Tomasz Stańczak stated earlier this year that privacy for institutions is a must. Ethereum’s Privacy Stewards team now runs 47 people. That’s not a niche research cluster. That’s a statement.

The rekt.news report cited Ali Yahya, general partner at a16z crypto, capturing the gap directly: “Bridging tokens is easy. Bridging secrets is hard.” Crypto moved value across chains. It never solved information portability. Once data hits a public ledger, it stays. Tokens transfer. Secrets only get protected or lost.

Regulators are reinforcing this from the other side. The European Data Protection Board has confirmed that blockchain data is not exempt from GDPR. Public keys, addresses, and transaction histories can all qualify as personal data. The UK’s Information Commissioner holds the same position.

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Stellar Already Runs Real Money

This matters because Stellar is not theoretical. Payroll systems run on it. Remittances flow through it. B2B payments, aid distribution, and real financial volume.

Raja Chakravorti, Chief Business Officer at the Stellar Development Foundation, argued the point from a business angle, saying transparency and privacy are complementary parts of trust, not opposites. Transparency creates accountability. Privacy creates safety. Institutions need both.

The Stellar Development Foundation’s work with Nethermind on this front points to where the design is heading: verifiable confidentiality, not anonymity absolutism. Privacy that regulators can read, institutions can deploy, and developers can maintain.

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The rekt.news research flagged what a16z called the lock-in effect. Once users build a financial history on a network, that exposure becomes permanent. Privacy will concentrate network power faster than speed or fees ever did. A few chains will dominate because they have become trusted custodians. Not the fastest chains. Most private institutions can actually use.

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