Taceo Brings Confidential Payments to Public Blockchains

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Public blockchains reveal too much, and Graz-based cryptography start-up Taceo wants to change that. The company has just launched Merces, its second product, which is designed to make payments on public blockchains confidential while keeping them traceable for regulators and auditors. Merces is available now on the Monad and World Chain networks, and Taceo already uses it for its own internal transactions.

The Problem: Every Payment Is Visible to Everyone

For banks and other financial institutions, public blockchains have so far been hard to use for one simple reason: every transaction is visible to anyone. Once it is known which wallet belongs to a company, its payroll can be traced, and suppliers could read the terms their competitors are getting.

Tokenized securities face a similar issue. With a digital bond, the issuer, the custodian and investors all need to rely on the same data, even though each party may only see its own share. Merces is built for exactly this scenario: several parties compute a shared result without ever seeing each other’s data.

How Merces Works

Technically, Taceo combines multiparty computation (MPC) with zero-knowledge proofs. With Merces, the blockchain stores neither amounts nor recipients, only a cryptographic summary. Balances are split into pieces and distributed across several independent machines, so no single participant ever sees the full picture. After each round of transfers, the network generates a mathematical proof that all transactions were valid and that nobody spent money they did not own.

Taceo positions the product as “compliant privacy”: confidentiality that is meant to be compatible with the regulatory requirements financial institutions face, so supervisors and auditors keep their view. The start-up is deliberately setting itself apart from earlier privacy approaches in crypto, which regulators often viewed with suspicion. Taceo has published the full cryptographic specification on the portal of the International Association for Cryptologic Research (IACR ePrint 2026/850).

“It is now clear that blockchains are becoming the infrastructure for financial business. The only open question was how to achieve the same confidentiality on them that people expect from a bank,” says Lukas Helminger, CEO and co-founder of Taceo. According to Helminger, the team has spent more than a year adapting its technology for the financial sector.

Four Partners Are Working on Integrations

At launch, Taceo has four partners building Merces into their products:

• IntellectEU: The core banking specialist is integrating Merces into its CatalyX platform, aiming to open access to the back offices of regulated banks. A joint demo is planned for the Sibos banking conference. “No bank is going to rebuild a payment stack that already works to get there,” says Jonathan Mayeur, head of product at CatalyX.
• LayerZero: The interoperability protocol, backed by a16z and Sequoia, is working on confidential transfers between different blockchains. The project starts as a testnet prototype and is not yet part of the mainnet launch.
• Orion Finance: The fintech, an alumnus of ABN AMRO’s Techstars “Future of Finance” accelerator, wants to use Merces to make tokenized investment portfolios confidential while keeping performance verifiable for investors. “A portfolio manager who publishes every rebalance is giving away the thing they are paid for,” says CEO Matteo Manzi.
• Zenith: Together with Taceo, Zenith is building confidential applications on the Canton Network, which the US central securities depository DTCC uses to tokenize US Treasuries.

From TU Graz to Sam Altman’s World

Taceo was founded in 2022 as a spin-off of Graz University of Technology and the Know Center research institute. The start-up became known mainly for its work with World, the iris-scanning project co-founded by OpenAI CEO Sam Altman. Taceo provides a key technology for it: using MPC, iris data is matched in encrypted form to ensure that each person registers only once, without the biometric data ever being exposed. According to the company, the technology now protects the data of more than 18 million people in 160 countries, making it one of the largest MPC deployments worldwide. Merces is also launching on World Chain, the project’s own blockchain. Other customers in the identity space include Boop, Mercle and ZKPassport.

In the summer of 2025, Taceo raised $5.5 million (around €4.8 million) in a seed round led by Archetype VC, with participation from a16z CSX, the crypto accelerator of Andreessen Horowitz, as well as Cyber.Fund, A.Capital Ventures and Polymorphic.

Crowded Field in Blockchain Privacy

Taceo is not alone in this space. Confidentiality on blockchains is considered one of the industry’s big unsolved problems, and many teams are working on it. Paris-based Zama relies on fully homomorphic encryption and is among Europe’s most highly valued cryptography start-ups. Aztec is building its own privacy network based on Ethereum, while Arcium, like Taceo, follows an MPC approach. Canton, meanwhile, is a network with confidentiality built into its architecture and is already used by large financial institutions. Whether Taceo’s focus on regulatory compatibility wins out against these approaches will likely depend on whether banks actually connect through partners like IntellectEU.