Binance co-founder Changpeng “CZ” Zhao warns that crypto’s lack of privacy is blocking its everyday adoption, echoing CoinDesk Consensus panelists from Hong Kong who called it a barrier to widespread institutional use.
Full blockchain transparency is being touted as the ultimate middle finger to democratization by shady banks and Wall Street fat cats operating in the dark. But here’s the problem: this means that anyone in the world can spy on the amounts you send, your wallet balances, and your transactions.
Imagine transferring your salary or sealing a big company project that requires the whole world to read every number – that’s not desirable, is it?
This is precisely the problem here. Crypto has been clamoring for adoption by Main Street and Wall Street for years, but this same “killer feature” of zero privacy is putting the brakes on hard.
“(Lack of) confidentiality can [be] the missing link for crypto payments adoption. Imagine, a company pays its employees in on-chain cryptocurrency. With the current state of crypto, you can pretty much see how much everyone in the company gets paid (by clicking on the sender address),” CZ said on X on Sunday.
Institutions share this concern
Fabio Frontini, Managing Director of Abraxas Capital Management, highlighted the need to ensure privacy in large institutional transactions if the use of public blockchains on Wall Street is to become the norm.
“Confidentiality, especially for large transactions, is, in my opinion, the key point, especially for institutional players,” says Fabio Frontini, CEO of Abraxas Capital Management. “Full transparency is not particularly good. In fact, you want transactions to be verifiable and visible, but only to certain people who should know exactly who is behind them,” Frontini said during the “2026 Outlook: The Institutional Market Cycle” panel in Hong Kong last week.
Frontini was responding to a question about when the institutional use of blockchain to issue traditional instruments like commercial paper will move from experimental to an everyday norm. Wall Street giant JPMorgan tested these waters in December by hosting a historic US$50 million 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 cash-on-delivery. JPMorgan handled the structuring and creation of on-chain tokens, while Galaxy Digital Partners LLC acted as the structuring agent.
The landmark deal highlighted the use of public blockchains like Solana to tokenize debt, 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 onto the chain at scale until they are sure the system will not expose them.
“They need to be confident that it’s not going to take one person finding out their address and then knowing every transaction they’ve made – that’s really critical,” Lovett said.
Thomas Restout, CEO of institutional-grade liquidity provider B2C2 Group, agreed that confidentiality is key, while highlighting “certainty of execution” as another key factor.
“It’s still a space that institutions are not comfortable in. They also need partners. Look at other channels that have gone private and are growing a lot 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, but you’re going to have to do this for $10,000 billion. And therefore the level of certainty that you have to achieve to operate at this scale is very high,” he explained.
