CUSD Stablecoin Overview

CUSD ($CUSD) - Privacy-Native Stablecoin

CUSD redefines what a stablecoin can be: private, programmable, and built for real-world use.

Executive Summary

Send offers CUSD ($CUSD), a USD-pegged stablecoin, on Canton Network via Brale for privacy-native transactions across institutional and retail use cases. CUSD enables confidential transactions by default while maintaining full regulatory compliance and 1:1 USD backing.

The protocol generates sustainable value through treasury yield management (~4% annually), with 100% directed to $CC buybacks. Users earn $CC rewards from Canton Network activity, creating a flywheel where $CUSD adoption drives engagement across Canton's ecosystem of products. Target metrics include $1b TVL in Year 1, achieved through GENIUS-aligned and privacy-preserving institutional onboarding.

Key Value Propositions

• Privacy-native transactions with selective compliance disclosure
• Direct $CC value accrual through automated buybacks (100% of yield)
• '$CC rewards' integration across Canton Network applications
• Enterprise-grade self-custody and regulatory framework

Privacy Architecture

Why Privacy Matters for Stablecoins

Unlike transparent stablecoins, CUSD protects enterprise data, user behavior, and strategy, without compromising regulatory compliance. It's built for users and institutions who don't want their financial activity exposed by default.

• Enterprise Risk: Competitors analyze cash flows, supplier relationships, and strategic positioning
• Individual Exposure: DeFi participants reveal net worth, trading strategies, and financial behavior
• Security Concerns: Large holders become targets for attacks and social engineering
• Commercial Disadvantage: Transparent balances weaken negotiating positions

Canton Network Privacy Solution

CUSD leverages Canton's confidential computing architecture:

• Private Transactions: Amounts and counterparties remain confidential between participants
• Selective Disclosure: Compliance reporting through privacy-preserving mechanisms
• Institutional Privacy: Enterprise treasury operations without strategic information leakage

Compliance and Regulation

CUSD establishes a new paradigm for privacy stablecoins through selective disclosure compliance - providing full regulatory transparency to authorized parties while maintaining transaction privacy for users. Unlike legacy privacy coins that rely on anonymity sets or cryptographic obfuscation, CUSD operates within established regulatory frameworks through Brale's institutional compliance infrastructure.

United States Framework

• Licensing: Full MTLs across all states as FinCEN-registered MSB with CAMS-certified compliance oversight
• Custody: Bankruptcy-protected accounts with federal OCC trust charter pursuit and quarterly board compliance reporting
• GENIUS Act Alignment: 1:1 reserves with monthly attestations through privacy-preserving mechanisms
• Transaction Monitoring: Real-time AML/BSA monitoring with 24-hour alert review and automated SAR filing

Privacy-Preserving Controls CUSD implements enterprise-grade compliance without compromising user privacy through selective disclosure protocols. On-chain wallet enforcement includes automated sanctions screening against OFAC lists without revealing transaction patterns to unauthorized parties. Compliance reporting occurs through zero-knowledge mechanisms that satisfy regulatory requirements while maintaining user transaction privacy.

Global Expansion Strategy

• European Union: MiCA compliance via VASP registration, transitioning to CASP/EMI licensing
• Asia-Pacific: Singapore (MAS) and Abu Dhabi (FSRA) institutional licenses with enhanced due diligence protocols
• Emerging Markets: Regulated subsidiaries in key corridors with risk-appropriate compliance frameworks

Regulatory Innovation: '$CC rewards' incentivize compliant ecosystem participation and proper regulatory adherence, creating positive alignment between compliance requirements and user incentives, while maintaining post-issuance transaction privacy.

Reserves

CUSD maintains 1:1 USD backing through diversified, institutional-grade assets generating sustainable yield, while ensuring stability and immediate liquidity. Reserve composition follows conservative allocation principles designed for capital preservation and consistent yield generation.

Asset Composition

• Short-dated U.S. Treasuries (primary yield generation ~4%)
• Cash Equivalents (liquidity buffer for redemption demands)

Custody and Verification

Reserve assets are held in segregated, bankruptcy-remote accounts with institutional custodians maintaining $49T+ AUM capacity. Daily automated reconciliation matches on-chain CUSD supply against fiat reserve balances, ensuring continuous 1:1 backing verification. Monthly independent attestations by certified public accounting firms provide additional verification layers.

Privacy-Preserving Transparency Proof-of-reserves operates through privacy-preserving mechanisms that enable regulatory transparency and user confidence without exposing specific asset positions or exact reserve composition to competitors or potential attackers. This selective disclosure approach satisfies compliance requirements while maintaining operational security.

Growth Mechanics: Launch with $25M seed reserves ensuring independent stability during initial low-volume phases. As TVL scales, yield allocation supports strategic diversification across authorized asset classes, while $CC rewards incentivize ecosystem deposits and broader adoption.

Revenue Share

Revenue distribution prioritizes ecosystem alignment with 100% of net treasury yields flowing on-chain to ecosystem participants, creating sustainable value without issuer extraction.

Allocation Framework

Treasury Yield (~4-5% annually)

• 100% → $CC Buybacks (deflationary pressure)

Economic Impact

At $1B TVL: ~$40m annual yields generate $40m in $CC buybacks, creating consistent deflationary pressure, while operational budgets are funded through separate contribution agreements and service revenues outside the buyback flow.

Automated Execution: Buyback mechanisms will operate autonomously through Brale oracles, ensuring consistent execution without manual intervention or timing manipulation. Early-phase $CC subsidies bootstrap rev-share during low-volume periods, transitioning to purely yield-driven buybacks as adoption scales.

Integrations and Features

CUSD provides privacy-native infrastructure across Canton Network applications, with programmable mint/redemption via API and immediate on-chain availability for confidential transactions.

Core Privacy Features

• Confidential Transfers: Transaction amounts and counterparties remain private
• Selective Disclosure: Compliance reporting without compromising user privacy
• API Access: Programmatic integrations maintaining privacy guarantees

Ecosystem Integration

• Canton Wallet: Private asset management and confidential DeFi interactions
• Canton Safe: Multi-signature treasury management for enterprises
• Canton Swap: Confidential automated market maker enabling low-slippage swaps between $CUSD and other Canton-native assets
• Send: Consumer payments with privacy-first Send Card integration
• Temple: Institutional workflow hub for orchestrating compliant, private settlement across Canton partners

Liquidity Infrastructure: Launch with deep $CUSD/$USDC pools on Canton AMM targeting 0.03% slippage for $1M transactions, supported by institutional market makers and $CC reward incentives for early liquidity providers.

Yield Potential and Incentives

The CUSD Boost Protocol combines treasury yields (~4%) with $CC rewards from Canton Network activity, creating enhanced returns for ecosystem participants without unsustainable token inflation.

Yield Enhancement Structure

• Base Treasury Yield: 4% from reserve management passed through to users
• $CC Rewards: Earned through $CUSD usage across Canton applications

Growth Incentives

• Early Phase: $CC emissions subsidize yield during low-volume periods
• Scale Phase: Automated buybacks from sustainable treasury yields
• Long-term: Self-sustaining flywheel driven by actual usage and fee generation

Target Metrics: Targeting up to 10x growth based on incentivized adoption models.

Alignment and Risks

Ecosystem Alignment

$CUSD aligns with Canton Network's privacy-first infrastructure while supporting ecosystem growth through direct $CC value accrual and $CC reward mechanisms. Issuer-neutral structure via Brale eliminates conflicts of interest while maintaining focus on user privacy and regulatory compliance.

Risk Management Framework

We mitigate downside scenarios proactively, pairing each identified risk with countermeasures that keep $CUSD stable, compliant, and trusted at scale.

Market Risks

• Peg Stability: Deep $USDC liquidity and institutional MM relationships
• Low Adoption: $CC subsidy programs and integrated user experiences
• Yield Competition: Privacy premium justifies competitive returns

Regulatory Risks

• Privacy Compliance: Selective disclosure capabilities satisfy oversight requirements
• Jurisdiction Changes: Multi-jurisdictional licensing provides regulatory redundancy

Technical Risks

• Canton Network: Gradual scaling with robust testing and reserve diversification

Assessment: Privacy-native design creates inherent differentiation from transparent alternatives, with alignment mechanisms favoring sustainable ecosystem growth over speculative activity. Risk mitigation strategies emphasize proactive compliance and user education rather than reactive adjustments.