Starknet develops the STRK20 token standard "balancing privacy and compliance," suitable for DeFi, stablecoins, and Bitcoin.

Ethereum Layer 2 Network Starknet is developing a new framework called “STRK20.” The framework is expected to be officially deployed later this year, enabling developers to launch privacy-focused stablecoins and other assets, with built-in compliant data access features to meet regulatory requirements.
(Background: Starknet launched Bitcoin staking and 100 million STRK incentives to strengthen the BTCFi ecosystem)
(Additional context: Starknet ecosystem lending protocol zkLend announced suspension: hacked in February with $9.5 million user confidence lost, $ZEND delisted and liquidity dried up…)

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• Token-level protection and compliance “viewing keys”
• Instant transaction settlement, targeting enterprise and institutional needs
• Support for ERC-20 and Bitcoin ecosystem expansion

Ethereum Layer 2 scaling solution Starknet is injecting new privacy capabilities into the decentralized finance (DeFi) ecosystem. According to reports, the development team StarkWare is creating a new technical framework called “STRK20,” which is expected to be deployed on the Starknet network later this year. The main goal of this framework is to allow development teams to seamlessly issue highly private, regulation-compliant stablecoins and various digital assets.

Token-level protection and compliance “viewing keys”

Unlike previous solutions relying on external privacy tools or mixers, the STRK20 framework embeds confidentiality directly into token contracts. By default, the system can hide transaction counterparties’ addresses, token types, and transfer amounts, ensuring that the public ledger cannot reveal transaction details. At the same time, this technology remains highly compatible with existing DeFi applications.

To balance user privacy protection with prevention of illegal activities, the STRK20 framework features a built-in “viewing keys” mechanism. When faced with legitimate legal requests, this key allows regulators and law enforcement agencies to access necessary transaction data, ensuring issuers can meet strict compliance standards.

Instant transaction settlement, targeting enterprise and institutional needs

StarkWare CEO Eli Ben-Sasson emphasizes that privacy features should not come at the expense of performance. Through the STRK20 framework, network transactions are expected to settle within 5 seconds, with fees below $0.20, greatly enhancing the practicality of financial applications.

Ben-Sasson further states that this built-in token-level privacy technology not only prevents liquidity fragmentation but also protects institutional funds from external tracking of their trading strategies. He is optimistic that this technology could increase institutional adoption of stablecoins by “about five times.”

Support for ERC-20 and Bitcoin ecosystem expansion

According to the team, Starknet’s solution is expected to be broadly compatible with the ERC-20 standard used by most Ethereum tokens, benefiting both enterprise payments and general DeFi activities. Additionally, this technology will serve as the underlying foundation for the recently announced Bitcoin asset “strkBTC” on Starknet, further expanding Bitcoin’s anonymous and confidential use cases in decentralized finance.