Inco and Toku Announce Confidential Stablecoin Payroll for W2 Employees Using cERC20 Standard

Global payroll represents one of the world's largest and most inefficient financial systems. The global payroll market reached $99 billion in 2023 and is expected to hit $134 billion by 2028,¹ yet the underlying infrastructure has remained virtually unchanged for decades. This antiquated system processes over $48 trillion in annual wages for 1.74 billion salaried workers globally through a fragmented network of local providers, banks, and regulatory frameworks.²

The current system's inefficiencies are stark: cross-border payments can take several days to settle³ and incur 6-7% transaction fees,⁴ while multinational companies must manage dozens of local payroll providers and bank relationships. Each jurisdiction requires separate systems, compliance processes, and reconciliation workflows, making real-time global payroll operations impossible. Companies lose billions annually to unnecessary fees, trapped working capital, and operational overhead.

Stablecoins present a fundamental solution to these systemic problems. Their 24/7 instant settlement capability eliminates traditional banking delays and intermediary fees. Instead of maintaining multiple local bank accounts and operating in multiple currencies, companies can operate from a single pool of stablecoin liquidity with complete transparency and automated reconciliation.

Stablecoin payroll, while efficient and reliable, introduces significant privacy challenges due to blockchains’ transparent, immutable nature. Public visibility of transaction details, such as amounts, dates, and wallet addresses, risks exposing sensitive payroll data, potentially revealing employee salaries and financial behavior. Identity linkage further heightens this concern, as blockchain addresses, though pseudonymous, can be associated with specific individuals over time, inviting unwanted profiling or targeting.

With this in mind, Inco and Toku are leveraging the confidential ERC20 token framework proposed by Inco and Circle Research to enable companies to distribute payroll in the cERC20 format. This will hide the payroll amount and the balance of each address while still preserving the flow of funds. The cERC20 token standard leverages Fully Homomorphic Encryption (FHE), a cryptographic technology that enables computation on encrypted data without decryption. This allows the movement of tokens onchain with the same benefits as standard ERC20 tokens without the public visibility of all transaction details. 

Companies will now be able to setup stablecoin payroll while ensuring amounts will remain confidential. Employees can subsequently choose to further transact in the confidentiality layer to hide their economic activity or unwrap their confidential assets to transact transparently.

Learn more about stablcoin payroll by reading Toku’s Stablecoin Compensation Primer. 

Inquire about confidential onchain payroll here.

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¹ Research and Markets. (2023, August 11). Global Payroll Market (2023-2028) by Component, Type, Business Size, Industry Vertical, and Geography, Competitive Analysis.

² International Labour Organization (2023) Global Wage Report 2022-2023

³ Bank of England. (2023, January 31). Cross-border payments. 

⁴ World Bank Group. (2022, September). Remittance Prices Worldwide - Issue 43.