Coinbase is working to add private transactions to its Layer 2 Base network, CEO Brian Armstrong said in an article on X, adding that more details will be shared in the near future.
Armstrong said Coinbase’s March 2025 acquisition of the team behind Iron Fish, a blockchain project known for creating privacy-preserving technologies, was part of the move toward private transactions.
This team was integrated into a new “confidentiality module” within the base. While the Iron Fish blockchain and its token have remained independent, the engineers who developed it are now working to create what the company called “privacy-preserving primitives” for Base.
“Privacy is essential to unlocking the full potential of an on-chain future,” Coinbase wrote in its original announcement.
Armstrong’s message comes at a time when interest in privacy coins is rising again following the global crackdown. Privacy-focused tokens like , And have increased this year, with ZEC alone increasing 460% in the last 30 days.
Privacy coins have been subject to crackdowns due to concerns over their potential use for illicit activities as tracing funds across their networks becomes more difficult or impossible.
EU and US regulators have responded to their popularity by tightening anti-money laundering (AML) and counter-terrorist financing (CTF) rules, leading to bans and delistings from exchanges.
However, research shows that despite these concerns, only about 7% of privacy coin transactions were linked to suspected illicit activity. Instead, the data suggests that liquidity is instead the basis for a currency’s use in illicit transactions, with Chainalysis data showing that darknet market users returned to BTC after XMR was delisted from Binance.
The company’s data also showed that only about 0.14% of all cryptocurrency transactions were involved in illicit activity.
