A stablecoin’s promise is simple: the assets backing it should cover the tokens in circulation. Giving blockchain applications a way to check that promise becomes harder when some of the financial records need to stay private.
Flare is addressing that problem with Flare Confidential Compute, or FCC. On October 1, the company announced its deployment on Songbird, Flare’s live canary network, with Hex Trust’s USDX becoming the first stablecoin to use its Proof of Reserves extension.
The system processes public and private reserve information together, then publishes a signed result showing whether the backing meets the required threshold. The private balances used in the calculation remain confidential.
For lending platforms and exchanges, the aim is to make reserve information usable by their software without requiring an institution to publish its underlying financial records.
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Checking Whether Every Token Is Covered
Hex Trust supplies two inputs for the USDX calculation: a public reserves amount and a restricted cash reserves amount.
FCC combines those figures inside a protected computing environment and compares the total with USDX supply across the ecosystem. It then signs a result indicating whether reserves provide 1:1 backing or better.
In plain English, the check asks whether the reported reserves cover at least one dollar for every dollar-referencing USDX token. The blockchain receives the conclusion rather than the private figures behind it.
“Integrating Flare Confidential Compute enhances the trust layer for institutional adoption by enabling real-time, onchain verifiability of USDX reserves and thus manifesting its position as a trusted stablecoin in the Flare ecosystem,” said Ben Usinger, Head of Stablecoins at Hex Trust.
The result has an immediate role on Songbird, where USDX serves as collateral in the FAssets system. Its feed is migrating to the reserve-based reference, with accompanying information showing whether the coverage requirement is met at each update.
Decentralized exchanges can also use the result as an input for pricing USDX. A reserve check informs that process; it does not itself guarantee a one-dollar market price.
How Private Data Becomes a Verifiable Result
FCC uses a Trusted Execution Environment, or TEE—a protected area of computing hardware that runs approved software while keeping sensitive inputs isolated.
Before a machine can participate, it must demonstrate that it is running an approved code version. That evidence is verified and recorded onchain. Instructions also require signatures representing a weighted majority of the network’s data providers before execution.
The machine signs its output, and a smart contract checks that the signature belongs to a registered machine before accepting the result. Flare’s developer documentation describes how these checks connect confidential computation with onchain verification.
That distinction matters: the system verifies the approved computation and its signed output. The usefulness of a reserve check still depends on the accuracy and completeness of the reserve records supplied to it.
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From Flare’s Roadmap to a Stablecoin Application
When Blockster covered Flare Confidential Compute in June, the proposed Songbird rollout was awaiting a July governance vote. The plan introduced protected computation as part of Flare’s broader push to support financial applications across networks.
The USDX application gives that technology a concrete institutional use: checking backing that includes information an issuer cannot publish openly.
The initial deployment runs on Google Cloud confidential computing, with the TEE machines operated by the Flare Foundation. Flare says the architecture is designed to accommodate more operators and hardware providers over time.
FCC is live on Songbird first. Deployment on Flare’s main network will follow separately.
Beyond Stablecoin Reserves
The same approach could support other financial products that rely on private records.
A tokenized fund could calculate a verifiable net asset value—the value of its assets after liabilities—without disclosing every holding. A lending platform could combine public market prices with private collateral information. A compliance service could return an eligibility result while keeping the underlying documents confidential.
These are potential applications rather than additional launches announced alongside USDX. Flare says its extension framework will open to builders later in the initial rollout period.
USDX provides the starting point: a defined reserve calculation, a signed answer and a way for financial applications to use it. For institutions weighing blockchain adoption, that offers a practical way to share the information a transaction needs while keeping sensitive records private.
Reporting by Lidia Yadlos
