Zama Spinout Raycash Opens Ethereum Beta for Private Stablecoin Payments

Raycash, a privacy-payments startup spun out of the cryptography developer Zama, has opened an Ethereum mainnet beta for confidential stablecoin payments, the company announced. The service encrypts user balances and transaction amounts directly on the public network, according to the startup's own claims, which remain unverified by independent auditors at this stage.

The company says more than 75,000 people joined its waitlist before launch — roughly the population of a mid-sized county seat — and that beta access will open in batches before broader availability. A waitlist figure is a marketing metric, not a usage metric; how many of those registrants transact on day one remains unknown.

What does the beta actually support?

At launch, the service supports USD Coin (USDC), the second-largest dollar-pegged stablecoin by circulation. Users convert stablecoins at a 1:1 rate into tokens issued under the ERC-7984 confidential token standard, then send or receive payments or earn yield through Morpho, the decentralized lending protocol. The underlying stablecoins can be recovered through what the company describes as a permissionless unwrapping process.

Raycash handles Ethereum gas fees in the background, meaning users do not need to hold Ether (ETH) to transact. That removes a common friction point for non-crypto-native users, though it also means the company intermediates part of the transaction pipeline that a purely self-custodial flow would leave with the user.

How does the fiat channel work?

Users can add funds through bank transfers, bank cards or existing stablecoin holdings, and withdraw to conventional bank accounts, according to the company. In practice, that places the product in the same operational territory as regulated crypto payment apps — a point the announcement does not address directly.

Any fiat on- and off-ramp operating at scale will, at some point, face banking partners' compliance requirements and, depending on jurisdiction, licensing questions. The company's statement is silent on which banking institutions provide the rails and under what regulatory permissions.

Is the custody model genuinely self-custodial?

Raycash describes its wallet as self-custodial and says its confidential tokens carry no freeze or confiscation function at the token level. That distinguishes the design from mainstream stablecoins such as USDC, whose issuer can blacklist addresses.

The freeze resistance applies to the token layer only. Once users convert back through the unwrapping process or move funds through bank rails, conventional controls reassert themselves — a boundary the announcement does not spell out.

Users can grant viewing access to selected third parties, such as accountants or auditors, an attempt to reconcile confidentiality with selective disclosure. The mechanism matters for any business user with reporting obligations; the company has not yet published details on how access revocation works.

What comes next?

Raycash is also developing Raycard, a card product for private spending. No launch date, issuing partner or supported network was disclosed.

The broader test is regulatory rather than technical. Encrypted balances on a public chain sit close to the line that United States and European authorities have drawn around privacy tools, and no enforcement posture toward ERC-7984-based payments has yet been established.

For now, the beta's batch-by-batch rollout gives Raycash a controlled window to demonstrate that confidential stablecoin payments can operate without freezing functions and still retain banking access. Whether banks and regulators tolerate that combination is the open question the launch announcement does not answer.