Binance co-founder Changpeng “CZ” Zhao warns that crypto’s lack of privacy is blocking day-to-day adoption, echoing CoinDesk Consensus Hong Kong panelists who called it a barrier to widespread institutional use.
Blockchain’s total transparency is being hyped as the ultimate democratizing middle finger to shady banks and Wall Street fat cats operating in the dark. But here’s the catch: this means that everyone globally can sniff your sending amounts, wallet balance and agreements.
Imagine connecting your salary or sealing a big company that makes the whole world read every digit – not desirable, right?
That is exactly the problem here. Crypto has been screaming for Main Street and Wall Street adoption for years, yet the same “killer feature” with zero privacy is hitting the brakes hard.
“(Lack of) privacy may [be] the missing link for adoption of crypto payments. Imagine a company paying employees in crypto-on-chain. With the current state of crypto, you can pretty much see how much everyone in the company is getting paid (by clicking on the from address),” CZ said on X Sunday.
Institutions share that concern
Fabio Frontini, CEO of Abraxas Capital Management, highlighted the need for privacy in large institutional transactions if the use of public blockchains on Wall Street is to become the norm.
“Privacy – especially for large transactions – is the key point, I think, especially for institutional players,” says Abraxas Capital Management CEO Fabio Frontini. “Total transparency is not very good. In fact, you want transactions to be auditable and visible, but only to certain people who should know exactly who is behind them,” Frontini said during the panel “The 2026 Outlook: The Institutional Market Cycle,” in Hong Kong last week.
Frontini was responding to a question about when institutional use of blockchain to issue traditional instruments like commercial paper will move from an experimental stunt to an everyday norm. Wall Street giant JPMorgan tested these waters in December by arranging a landmark $50 million US commercial paper offering for Galaxy Digital Holdings LP on the Solana blockchain.
Coinbase Global and Franklin Templeton picked it up, with issuance and redemption settled in Circle’s USDC stablecoin for near-instant delivery-versus-payment. JPMorgan handled the structuring and creation of tokens on the chain, while Galaxy Digital Partners LLC acted as the structuring agent.
The landmark deal highlighted the use of public blockchains like Solana for debt tokenization, but also exposed the lack of transparency.
Emma Lovett, head of credit for the Markets Distributed Ledger Technology team at JP Morgan, who was one of the panelists, emphasized that institutions will not move massive assets on-chain at scale until they can trust that the system will not reveal them.
“They need to be confident that it’s not going to take one person to figure out what their address is and then know all the transactions they’ve made — that’s really the key,” Lovett said.
Thomas Restout, CEO of institutional liquidity provider B2C2, agreed that privacy is key, while highlighting “certainty of execution” as another key factor.
“It’s still a space that institutions aren’t comfortable with. They also need partners. You look at other chains that have gone private and do a lot of development for institutions. So if you’re a big institution, you always have to imagine that you’re not going to try this for $10,000 — you’re going to have to do this for $10 trillion, and so you definitely need it, and it’s definitely a level that you can reach. high,” explained he.
