Zama Spin-Off Raycash Launches Encrypted Stablecoin Payments App on Ethereum

Raycash has launched its mainnet app on Ethereum, introducing a retail-focused stablecoin payment platform that uses Fully Homomorphic Encryption (FHE) to keep transaction amounts and balances confidential. By wrapping existing stablecoins into private tokens, the app aims to solve the visibility issues of public blockchains while maintaining the accessibility of traditional fintech applications.

What was announced

Raycash is the first retail application built on the Zama Protocol, designed to allow individuals to hold, send, and earn yield on dollars with the same confidentiality as cash. The platform addresses a fundamental characteristic of public blockchains: the fact that every balance and transaction amount is typically visible to any observer. Raycash solves this by wrapping existing stablecoins, starting with USDC, into confidential tokens based on the ERC-7984 standard.

The app is designed to remove the technical friction usually associated with decentralized finance. It handles blockchain gas fees in the background, meaning users do not need to hold or manage ETH to transact. Users can top up their accounts via bank transfer, card, or stablecoin, and can withdraw funds directly to a bank account. Payments are settled on-chain using payment links, but the specific amounts remain encrypted. Because the wrapping process is permissionless, users can unwrap their tokens back into the underlying stablecoin at any time.

Key features of the mainnet launch include:

• Private Yield: Users can earn yield on idle balances through an integration with Morpho, managed directly within the app.
• Self-Custodial Control: Raycash provides a self-custodial wallet where the confidential tokens have no freeze or seize functions at the token layer.
• Selective Disclosure: While transactions are private by default, users can grant view access to specific parties, such as auditors or accountants, for compliance and record-keeping.

The app is currently in a private beta phase, rolling out in stages to a waitlist that exceeded 75,000 people prior to launch. The company also confirmed that a Raycard for private spending is currently in development.

"People shouldn’t have to choose between the benefits of stablecoins and keeping their financial information confidential. Today, using dollars onchain means putting your balance and every payment on a public display. But privacy alone isn’t enough, it has to be easy. Raycash gives people a single app to hold, send and grow their money, with the confidentiality of cash. We don’t ask anyone to trust a new stablecoin: we take the dollars people already use and make them private, and they can move back out whenever they want. The response to our waitlist shows how much demand there is for that, and we’re excited to start bringing users onboard,"

Valerio Leo, CEO and Co-Founder of Raycash.

The companies involved

Raycash is a specialized payment application that was spun out of Zama to focus on consumer-facing confidential finance. Zama is a cryptography company that develops open-source Fully Homomorphic Encryption (FHE) solutions for blockchain and artificial intelligence. By enabling computation on encrypted data without the need for decryption, Zama aims to provide a layer of end-to-end encryption for public smart contract platforms.

Zama has established itself as a major player in the privacy-enhancing technology (PET) sector, securing significant venture backing to bring FHE to mainstream software development. Its protocol allows for the creation of confidential smart contracts where the state of the contract remains private even as it is updated on a public ledger. While Raycash operates as an independent entity focused on the retail payment experience, it remains the flagship consumer implementation of Zama’s underlying encryption technology. The launch represents a transition for the Zama ecosystem from infrastructure development to the deployment of verticalized, user-ready financial products.

What FF News has reported before

FF News has followed Zama’s development as it builds the infrastructure for on-chain privacy. In June 2025, Zama raised $57M in Series B funding to advance its goal of bringing end-to-end encryption to public blockchains. The company has since focused on institutional and DeFi integrations, including a partnership with Morpho and Steakhouse Financial to launch confidential USDC lending. Zama’s reach into the retail market was further highlighted when Revolut listed the $ZAMA token across the EEA. Most recently, the company scaled its DeFi footprint by launching 16 new vaults and a swap protocol in collaboration with Morpho.

What this means

The launch of Raycash marks a significant shift in the stablecoin market, moving away from the "transparency at all costs" model toward one that mirrors the privacy of traditional banking. For years, the lack of confidentiality has been a primary barrier to corporate and high-net-worth adoption of public ledgers. By using FHE to wrap existing assets like USDC rather than launching a new, unproven stablecoin, Raycash bypasses the liquidity and trust hurdles that have hindered previous privacy-centric tokens. This puts pressure on traditional neo-banks, who must now compete with a self-custodial platform that offers the same ease of use but with superior privacy and native yield. The industry must now consider whether public-by-default transactions will remain the standard for retail payments.