XLS-96 could shield issued asset balances and payment amounts while keeping participating XRP Ledger addresses publicly visible during confidential transfers. Homomorphic encryption and zero-
The XRP Ledger is testing a privacy upgrade that could allow users to transfer issued assets without exposing payment amounts publicly. According to XRPL validator Vet, the XLS-96 Confidential Transfer amendment uses cryptographic technology to shield balances and transaction values.
Vet demonstrated the feature on the XRP Ledger Devnet by issuing a confidential Multi-Purpose Token and shielding his associated token balance. Under this design, blockchain observers can still identify participating addresses, but they cannot determine the amounts stored or transferred between them.
However, the system does not remove oversight completely because authorized issuers and auditors can decrypt confidential amounts when necessary. This approach could give asset issuers greater financial privacy while preserving the verification standards required across a decentralized blockchain network.
Also Read: Crypto Market Holds Firm as Bitcoin Stays Above $65K, Bubblemaps Surges 90%
A central challenge with confidential transfers involves verifying payments without revealing how many tokens each participant owns or transfers. According to Vet, the proposed XRPL upgrade addresses this problem by combining homomorphic encryption with zero-knowledge proofs.
Homomorphic encryption allows mathematical calculations to occur directly on encrypted information without requiring validators to decrypt the underlying values. Consequently, the XRP Ledger can process additions and deductions involving protected balances while keeping those amounts hidden from public observers.
This is SO cool !!
I just used up for voting amendment XLS-96 Confidential Transfer / privacy on the XRP Ledger dev net enabled by homomorphism and ZK proofs.
What's going on here and how do nodes know payments are correct while not able to see the amounts ?
1) I issued a… pic.twitter.com/eHldXkgKkn
— Vet (@Vet_X0) August 10, 2026
Vet explained that the system also operates with two underlying components described as an Inbox and a Spending box. Meanwhile, zero-knowledge proofs allow validators to determine whether users have sufficient funds without learning their exact balances or payment amounts.
For example, validators must confirm that a sender’s remaining balance stays at zero or higher once a payment completes. Therefore, someone cannot spend more confidential tokens than their available balance while hiding the actual figures involved from network participants.
Validators receive cryptographic proof confirming the transaction follows network rules rather than receiving the private financial information behind that transaction.
Additionally, this design separates payment verification from public visibility, allowing XRPL nodes to enforce transaction rules without exposing confidential amounts. The XLS-96 proposal specifically targets issued assets using confidential MPTs and does not make every transaction across the XRP Ledger private.
Moreover, XRP transfers would not automatically gain confidential amounts simply because developers are testing this functionality within the broader network. The amendment remains under testing on XRPL Devnet, meaning its availability there does not guarantee adoption across the public ledger.
If validators approve XLS-96 through XRPL’s amendment process, issuers could gain another option for handling sensitive token balances and transfers. The proposed upgrade therefore centers on selective transaction privacy while maintaining the verification mechanisms required for secure XRP Ledger payments.
Also Read: What Is Crypto Fundraising and How Does It Work?
The post XRPL Expert Reveals How New Privacy Upgrade Can Hide XRP Ledger Payment Amounts appeared first on 36Crypto.
