Sodot Partners With Aleo to Address $1.22T Privacy Risks in Institutional Stablecoin Payments

Sodot, a crypto key management firm that provides self-hosted tools for securing private keys and exchange API keys, announced a partnership with Aleo to add MPC signing support for the privacy-focused Layer-1 blockchain. 

The collaboration focuses on addressing a $1.22 trillion privacy risk in institutional stablecoin payments, given that public blockchains can make sensitive transaction details visible to others.

According to the press release, Sodot will support Aleo’s transaction signing through its self-hosted MPC infrastructure. This will allow custodians, asset managers, and wallet providers to seamlessly integrate Aleo into their workflows. 

“At Sodot, our mission is to redefine how crypto companies manage their most sensitive keys. By implementing MPC for Aleo, we are enabling our customers to extend the core promise of security into the realm of transactional privacy, for both funds and data,” said Ido Sofer, CEO of Sodot.

While most institutions often rely on MPC to distribute key risk, current MPC wallet setups can “leak” trade metadata to a provider. This shortcoming is one of the reasons why over 99% of stablecoin transaction volume has remained on public blockchain networks. 

The Stablecoin Privacy Gap Comes Into Focus

Aleo’s Privacy Gap Report highlights the scale of public exposure in stablecoin on-chain operations. It acknowledges the growth in this market in recent years; adjusted stablecoin transaction volume hit $1.25 trillion in September 2025, and custodian activity rose 256% from a year earlier.

The report further characterizes private or confidential settlements as a small share of overall stablecoin activity. Only $624.4 million was transacted on private rails over the past year; this is barely a fraction of total stablecoin volume. 

To explain the risk, the report cites visibility within institutional workflows. It specifically mentions Wintermute, which runs about 73,000 transactions a day, as an example of how public ledgers can reveal inventory and trading flow patterns. The report also cites OSL, noting an average ticket size of $1.47 million, and argues that large bilateral trades can leak price-discovery data.

MPC Integration Unlocks Institutional-Grade Privacy on Aleo

Aleo positions its Layer 1 network as a go-to platform for confidential stablecoin payments. This level of functionality is supported by its Provable Shield Wallet, which uses zero-knowledge cryptography to obfuscate on-chain transactions. 

Sodot’s MPC integration aims to address one of Aleo’s key infrastructure challenges: none of the current MPC-based solutions are compatible with its Layer 1 chain.

Aleo’s COO, Leena Im, commented on the milestone, noting that the partnership removes the final friction point for private institutional finance. 

“This partnership delivers the ‘Holy Grail’ of on-chain assets: data privacy via zero-knowledge proofs, backed by multi-party security. This goes beyond just protecting sensitive financial data; we’re building the trustless infrastructure required for the next $10 trillion in private capital to move on-chain,” added Leena Im.

The announcement also included a projection; if just 5% of institutions use Aleo private rails, about $1 billion to $2.5 billion in stablecoin transactions per month could move out of public view.

“Following the shared work by the teams,  Aleo is better positioned to meet the security and operational standards required for institutional adoption,” added Sofer.