Starknet Enhances Privacy with STRK20 for ERC-20-like Assets, Develops Ztarknet for Zcash Integration

Starknet has introduced STRK20, a privacy framework enabling programmable private money and Zcash-like assets on its layer 2 network. This initiative is being developed in parallel with Ztarknet, a project aimed at bringing Starknet’s execution engine to the Zcash ecosystem.

STRK20, activated by June 2026, allows for confidential balances and transfers for assets adhering to ERC-20-like standards. This means the sender, receiver, and transaction amounts can be hidden from public view. The framework supports private decentralized finance (DeFi) activities, including swaps, lending, and staking, while maintaining transaction confidentiality. To address compliance concerns, STRK20 incorporates viewing keys and selective disclosure mechanisms. Viewing keys permit authorized parties, such as auditors, to access transaction details, while selective disclosure enables users to suggest specific facts about their activity to designated parties without revealing all information.

The research describes the result as enabling Zcash-like private assets directly on Starknet. The first major asset to utilize STRK20 is strkBTC, a shielded version of Bitcoin on the network.

Ztarknet Development

Concurrently, the Ztarknet project is in development to integrate Starknet’s execution engine into Zcash as a layer 2 solution. Its testnet was launched in November 2025, featuring a live explorer that demonstrated the verification of Circle STARK proofs on a modified Zcash testnet. Ztarknet is designed to operate without altering Zcash’s existing shielded pools. The project utilizes ZEC, Zcash’s native token, for settlement fees on the Zcash base layer and relies on the Madara sequencer for transaction ordering and the Stwo prover for generating STARK proofs.

Key technical groundwork for STRK20 was laid with the Starknet v0.14.2 upgrade in April 2026. This upgrade enabled native STARK proof verification through a proposal known as SNIP-36.

Prominent figures in the blockchain space, including Eli Ben-Sasson and Zooko Wilcox, are reportedly involved in both the STRK20 and Ztarknet efforts.

Implications for Privacy and Compliance

The STRK20 framework’s built-in compliance features, such as viewing keys and selective disclosure, are intended to mitigate regulatory pressures historically faced by privacy-focused cryptocurrencies. The research suggests that as global privacy regulations evolve, platforms offering compliant private transactions may attract institutional interest. For DeFi, the ability to conduct confidential swaps and lending could make onchain finance more accessible and practical for users who prefer to keep their financial activities private.

Future Outlook

However, several uncertainties remain regarding Ztarknet’s future. Key milestones ahead include its progression from testnet to a production environment, the practical performance of ZEC-based settlement, and the extent of developer adoption. The research indicates that these factors will be crucial for Ztarknet’s success.

Broader Context

Source materials place the factual news in this context: Starknet now offers programmable private money, the kind of confidential digital cash Zcash pioneered, through its new privacy features.