XRP Ledger Advances Confidential Token Standard for Banks

TLDR The XRP Ledger developer committee has proposed the Confidential MPT standard under XLS-0096 to enable private issued token transfers. The draft integrates EC-ElGamal encryption and zero-knowledge proofs to hide balances and transaction amounts. Validators can still verify that OutstandingAmount does not exceed MaxAmount without decrypting confidential balances. Issuers retain full control, including the ability to freeze accounts and execute clawbacks when required. The proposal applies only to issued tokens and does not change the functionality of XRP. The XRP Ledger developer committee has proposed a new privacy standard for issued tokens. The draft, titled XLS-0096, introduces Confidential MPTs to hide balances and transfer amounts. The proposal aims to address banks’ privacy demands while preserving public supply verification. XRP Ledger Introduces Confidential MPT Standard XRPL contributor Shawn Xie authored the specification under the title “Confidential Transfers for Multi-Purpose Tokens.” He submitted the draft to the community repository for technical review. The proposal builds on the existing XLS-33 Multi-Purpose Token framework. However, the new draft integrates EC-ElGamal encryption and zero-knowledge proofs. These tools encrypt individual balances and transaction amounts. At the same time, the design keeps the accounting structure defined under XLS-33. Xie wrote that “confidential transfers protect user balances while maintaining supply integrity.” He explained that validators can still verify that OutstandingAmount remains less than or equal to MaxAmount. Therefore, the system keeps the total token supply publicly auditable. The draft confirms that issuers retain full administrative authority. Issuers can freeze accounts and execute clawbacks where required. The framework also treats a designated second issuer account as a non-issuer holder. Four Core Properties Shape the Privacy Framework The GitHub documentation outlines four primary proper...