Payy has announced a privacy-enabled Ethereum layer 2 that it claims will make on-chain financial activity effectively “invisible” to the public eye.

Payy, which operates a privacy-focused wallet and a Visa-powered crypto card, said in a Wednesday X post that its layer 2 network can now be integrated into MetaMask, and it will make ERC-20 transfers private by default without making any smart contract changes.

“In the past, privacy always had tradeoffs: bad UX, fragmented liquidity, limited compatibility. With Payy, privacy is invisible,” the project said.

According to the project’s website, Payy aims to make stablecoin usage private by design while offering support for all ERC-20 tokens.

Payy is targeting two main user segments specifically: institutions and fintech firms that want to bring flows on-chain “without fear of analysis and exploitation,” and privacy enthusiasts that want to use tools without having to juggle between multiple wallets.

“Crypto natives will use their existing wallets and apps, while Fintechs and TradFi will onboard through our distribution partners,” Payy said.

The layer 2 network routes transactions through private ERC-20 pools, through which users’ transactions are automatically routed when using traditional wallets like MetaMask, thereby effectively concealing the destination of funds, which would have otherwise been publicly visible.

When interacting with decentralized finance protocols through smart contracts, funds are withdrawn to a new, freshly generated address.

“Private transaction data goes to offchain Privacy Vaults,” it said, adding that “users can choose applications and contracts to interact with based on the privacy-compliance tradeoff.”

To start off, Payy said it would bootstrap the network using 100,000 users that already use its wallet service, alongside “some of the largest stablecoin players” that will be announced in the coming weeks.

“I firmly believe privacy is the final barrier to critical mass adoption. By removing it, we’re unblocking the path for the $2 quadrillion global payments economy to move onchain, without turning every transaction into a data leak,” Payy CEO Sid Gandhi said in a separate X post.

Privacy tools step back into the spotlight

Payy’s launch comes at a time when demand for privacy-preserving tools has grown. Throughout 2025, some of the popular privacy tokens, such as Monero (XMR) and Zcash (ZEC), have seen a resurgence.

Meanwhile, Ethereum (ETH) developers are also working on wallet-level privacy features via Kohaku, and the Ethereum Foundation announced a privacy roadmap in September. The foundation said at the time that the roadmap’s goal is to ensure Ethereum avoids becoming “the backbone of global surveillance.”