TL;DR:
- RippleX published a whitepaper proposing confidential transfers for multi-purpose tokens on the XRP Ledger using zero-knowledge proofs.
- The system conceals amounts and balances through EC-ElGamal encryption and Bulletproofs, while keeping sender and receiver identities visible.
- The proposal includes issuer controls, selective disclosure for auditors and conversion between public and confidential token states.
The research division of RippleX published a whitepaper outlining the implementation of confidential transfers for multi-purpose tokens —known as MPTs— on the XRP Ledger. The initiative aims to address one of the main barriers to mass adoption by large financial institutions: the absence of transaction privacy on public blockchains, without abandoning regulatory control mechanisms.
In the current version of the protocol, anyone can query the balance of any address and track its movements. The proposed standard, called Confidential MPT, replaces visible values with data encrypted via the EC-ElGamal system.
How Would the New System Work?
To validate transactions without exposing the amounts involved, the protocol introduces zero-knowledge proofs: validators can confirm that the sender has sufficient funds without accessing the transferred amount or the remaining balance. The system’s efficiency relies on Bulletproofs, an advanced cryptographic method that reduces the computational load on network nodes.
The document’s authors —Murat Cenk, Aanchal Malhotra and Joseph A. Akinyele— emphasize that the proposal does not seek full anonymity. Sender and receiver identities remain public, which preserves the XRP Ledger’s account-based model and avoids the regulatory constraints associated with mixers or privacy coins like Monero.
XRP: Selective Privacy, not Total Opacity
The design incorporates three functionalities oriented toward corporate use. Token issuers —banks or stablecoin providers— retain freezing and forced fund recovery capabilities. The system also includes a selective disclosure model: the account holder can provide a cryptographic key to an auditor or regulator to verify the integrity of operations without publicly exposing the data. Finally, users can convert their tokens between public and confidential states instantly.
If the proposal is approved by the community through the protocol’s amendment process, the XRP Ledger could become a reference platform for the issuance of private digital assets, in direct competition with enterprise networks such as Hyperledger.
Strategically, the proposal aims to prepare the infrastructure for the launch of bank stablecoins and CBDCs on the ledger.
