Zama - Unlocking Regulated Use Cases for Privacy-Preserving Stablecoins

hi [Applause] everyone okay I don't have the slide maybe I'll start by introducing myself so gazi from Zama we the company behind fhe to bring compliance and confidentiality on chain so we're at the stable Summit and the question is why would we need confidentiality for stable coins and there are many use cases that we have encountered as we deal with our clients that I wanted to share with you today so the first one is you know we're currently running a number of PC's with private equities and mutual funds that want to tokenize their LP shares here comes the problem so they have clients that want to Leverage The composability while keeping the confidentiality of public blockchains if you want to preserve the confidentiality end to end when you buy shares you need to mask the amount otherwise people know how much shares you bought when you pay dividends same thing if a share pays 10 cents and I see that $1,000 have arrived on my stable coin then I know that I have 10,000 shares so what people do they basically do offchain payments they can't use table coins if confidentiality is in issue for their clients and so for these they're Reinventing the wheel pretty much so we have two private equities that are going going to release a confidential stable coin to be able to trade and distribute dividends for the clients that chose to have confidential LP shares but here is another one if you're doing remittances which is a big use case for stable coins and you're doing it on a public blockchain everyone knows your balance which means if you are in a not so safe country some people may know that you have just received $500 or $1,000 and may come after you and so by again providing the confidentiality people know that you got a transfer they just don't know how much you got corporate payments so as companies and this is very nent today but as companies adopt stable coins to pay their suppliers they don't necessarily want to know they don't necess want all the competitors to know how much they pay to home so confidentiality again is a requirement salaries and compensations so this is more of a gdpr topic if you know and gdpr uh salaries are considered private data which means your employee needs to consent to receive these payments in a clear public non-encrypted uh way and finally withholding taxes so same thing in certain countries the withholding tax rate dgates information about your private data it could be the church tax in Germany it could be the income bracket in some other countries that don't have flat taxes so for these again withholding taxes will tell private information about the receiver so how do we do it and this is something that we're announcing at FCC uh this week we've started a about a year ago the journey was to run F on extended EVMS and if in case you're following us we've already signed a number of clients but the next step is to bring it to any public blockchain so tomorrow we're announcing how we bring confidentiality and compliance to ethereum and other evm based public blockchains the idea is basically an ethereum smart contract or a polygon smart contract will continue to have to function as it used to but we have handles to encrypted data and will be able to leverage an AP coprocessor to execute any smart contract operations they want so they can compare they can add they can subtract they can multiply like they would on solidity except that they're not manipulating clear data they're manipulating encrypted data and the valid ators executing the smart contracts don't see anything they just take encrypted inputs they execute the smart contracts they get encrypted outputs without having decrypted anything the only people who can decrypt are obviously the account holder and any other wallet address that has been cleared on the smart contract these wallets would be these addresses would be typically The Regulators and the compliance officers so let's say HSBC uh is issuing the smart contract and they want to make sure that all the HSBC clients are visible to HSBC compliance officer they can do that but it could also be the French regulator who wants to see the balances and transaction values of all the accounts coming from France and so that's what we mean by compliance and Regulatory compliant confidentiality whatever the conditions are are explicitly stated on the smart contract so people know there is an audit log and there is a compliance that comes at whatever level that needs to come uh we therefore position the public FH blockchain as the best of the Two Worlds the public blockchains had a lack of confidentiality that prevented them from taking care of certain use cases the private blockchains were great but had you you had to trust those who were running the private blockchains and two composability was an issue and so we come and Bridge these two words we're still public we're just protecting the data that needs to be protected and in the case of stable coins what we've seen is that certain stable coin providers wanted to keep balances encrypted so they still have the old world where there is a clear balance and the also have a second balance that is encrypted to be able to deal with a special use cases where such confidentiality is required and I mean I see that um almost over time so I'll leave it to some questions otherwise you know happy to see you in the coming you know to today or in the coming days at FCC thank you [Applause] no questions yeah you should ask I haven't seen yeah go ahead curious about the way you give access to Reg is access always surve the access is in the smart contract so in the public smart contract running on ethereum you have a list of addresses with conditions around what access whether they can get access or not so that's why I mentioned if you are HSBC and you want to see your HSBC accounts you could have a function in the smart contract says if the wallet is coming from an HSBC compliance officer and if the account is an HSBC account then I will give you I will grant you the access to that to certain information or to all information or to a score on that account so you you but it's explicit so it's not someone who can get the access the access is granted in an explicit way and on the decryption processor you will see that whoever is the compliance officer has requested and was granted access to uh check your balances so there is full transparency on both sides who gets access on what conditions but also who us that access and when uh you know to to basically avoid frauds and cyber it's for cyber security reasons I mean most of our clients are again more more on the private equity and mutual fund so it's regulation is top of mind for them