Payy launches as Ethereum’s first privacy-enabled EVM L2
Crypto project Payy, a privacy-focused wallet that works alongside a crypto bank card, has launched an ethereum layer-2 network designed to support private ERC-20 transfers.
In an announcement via X on Wednesday, Pei said users can add the network as a custom chain in MetaMask, and that ERC-20 transfers made on it will default to private pools “with no smart contract changes required.”
Pai said the two main types of users on the network will be institutions and fintech companies that want to limit public transaction tracking and use privacy tools without “multiple wallets” to bring crypto-native financial flows onchain.
Payy said it has signed undisclosed launch partners among stablecoin issuers that it plans to name in the coming weeks.
The network is compatible with any Ethereum Virtual Machine (EVM) wallet, and according to the project's website, Layer-2 is primarily focused on enabling private coin transfers on the network, although it supports all ERC-20 tokens.
Following the announcement, Pey CEO Sid Gandy also shared more details on X, noting that Pey is working to make large traditional financial institutions more comfortable moving capital on-chain.
“Almost every bank, fintech and enterprise is telling us the same thing: if their financial data is exposed to the world, they can't move real capital flows up the chain,” he said.
Pay explained that Layer 2 hosts private ERC-20 pools where users' transactions are automatically transferred when using wallets such as MetaMask. This allows users to move money from their regular wallets without publicly exposing transaction partners on the Payy network.
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When connected to decentralized financial applications and smart contracts, funds are transferred from private pools to new addresses.
In the past, Pay has primarily offered its own privacy-focused wallet and crypto bank card, which will launch in mid-2025. The project claims to have reached approximately 100,000 users since then.
There are other L2s and protocols that provide privacy services on Ethereum, such as Aztec Network and Railgun.
Meanwhile, there's a host of privacy-focused tokens like Zcash (ZEC) and Monero (XMR) that exploded in popularity in 2025 amid growth in the crypto privacy sector over the past year.
According to Pei, it aims to provide a point of differentiation by reducing the operational complexity of using privacy tools, such as managing multiple wallets or switching between protocols.
However, Pay is not the only one working on this. Cointelegraph reported in October that Ethereum developers were working on improving wallet privacy as part of Kohaku's roadmap.
Kohaku's goal is to reduce dependence on central entities that track transactions, and includes features such as private sending and receiving.
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