EPOCH: Regulatable Privacy-Preserving Cross-Chain Payment Channel Hubs For Decentralized Smart Economy

In smart-economy applications, decentralized infrastructures are increasingly adopted to support large-scale, trustful transactions, where cross-chain payment channel hubs (PCHs) serve as a key mechanism for fast and low-cost settlements across heterogeneous ledgers in retail, mobility, and service platforms. However, existing designs struggle to reconcile privacy protection with regulatory oversight, both of which are essential pillars for supporting smart-economy applications. To address this challenge, we propose rEgulatable Privacy-preserving crOss-chain Channel Hubs (EPOCH), the first PCH scheme that ensures privacy protection while enabling decentralized regulatory oversight in cross-chain smart-economy systems. EPOCH achieves privacy protection by ensuring unlinkability between payer and payee, realized through an innovative design that combines updatable commitments and randomizable signatures with zk-SNARKs binding hidden states, so that intermediaries cannot correlate transaction flows. Building upon strong privacy guarantees, EPOCH achieves regulation by constructing a novel decentralized committee mechanism that integrates distributed key generation, threshold decryption, and homomorphic encryption, enabling the Smart Economic Regulatory Committee (SERC) to conduct selective audits under collective authorization without compromising user confidentiality. Experimental results demonstrate that EPOCH achieves secure, private, and auditable cross-chain transactions with practical efficiency, requiring only 5.70 KB of communication and 13.08 seconds of computation per payment. Compared with existing privacy-preserving channels, EPOCH introduces decentralized regulatory capability at a similar cost, showing its feasibility for real-world deployment in cross-chain smart-economy scenarios.