Binance co-founder Changpeng “CZ” Zhao warns that cryptocurrencies’ lack of privacy is blocking everyday adoption, echoing CoinDesk Consensus Hong Kong panelists who called them a barrier to widespread institutional use.
Blockchain’s full transparency is touted as the ultimate democratizing middle finger to shady banks and Wall Street bigwigs operating in the dark. But here’s the catch: it means anyone around the world can spy on your shipment amounts, wallet balances, and offers.
Imagine transferring your salary or sealing a big business move that will have everyone reading every digit; It’s not desirable, right?
That is precisely the question here. Cryptocurrencies have been crying out for Main Street and Wall Street adoption for years, yet this same zero-privacy “killer feature” is hitting the brakes hard.
“(The lack of) privacy can [be] the missing link for crypto payment adoption. Imagine, a company pays its employees in on-chain cryptocurrencies. “With the current state of cryptocurrencies, you can see how much everyone in the company is getting paid (by clicking on the sender address),” CZ said on X on Sunday.
Institutions share that concern
Fabio Frontini, CEO of Abraxas Capital Management, highlighted the need for privacy in large institutional transactions so that the use of public blockchains on Wall Street becomes the norm.
“I think privacy, especially in the case of large transactions, is the key point, especially for institutional players,” says Fabio Frontini, CEO of Abraxas Capital Management. “Full transparency is not particularly good. In reality, what you want is for transactions to be auditable and visible, but only to certain people who should know exactly who is behind them,” Frontini said during the “Outlook 2026: The Institutional Market Cycle” panel 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 go from an experimental gimmick to an everyday norm. Wall Street giant JPMorgan tested these waters in December by arranging a landmark US$50 million commercial paper issuance for Galaxy Digital Holdings LP on the Solana blockchain.
Coinbase Global and Franklin Templeton took it over, with issuance and redemption settled in Circle’s USDC stablecoin for near-instant cash on delivery. JPMorgan handled the structuring and on-chain token creation, while Galaxy Digital Partners LLC acted as structuring agent.
The landmark deal highlighted the use of public blockchains like Solana to tokenize debt, but also exposed a lack of transparency.
Emma Lovett, credit leader for JP Morgan’s distributed markets ledger technology team, 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 expose them.
“They need to be sure that it’s not going to take one person to find out what their address is and then know all the transactions they’ve made; that’s really key,” Lovett said.
Thomas Restout, group CEO of institutional-grade liquidity provider B2C2, agreed that privacy is key, highlighting “execution certainty” 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 are doing a lot of development for institutions. So if you’re a large institution, you always have to imagine that you’re not going to try this for $10,000; you’re going to have to do it for $10 billion. And so the level of certainty that you need to achieve to operate at that scale is very high,” he explained.
