CZ of Binance aligns with Consensus panelists regarding privacy issues hindering cryptocurrency adoption.

The absence of privacy poses an obstacle to both mainstream and institutional adoption of cryptocurrency and blockchain technology, according to CZ and industry professionals.

Changpeng "CZ" Zhao (Nikhilesh De/Modified by CoinDesk)

Key points:

• Crypto leaders, including Binance co-founder Changpeng Zhao, caution that the extreme transparency of public blockchains is hindering widespread adoption of digital currencies.
• Institutional executives from companies such as Abraxas Capital, JPMorgan, and B2C2 assert that significant transactions necessitate privacy to ensure that only authorized individuals can view the parties involved, while still allowing for auditability.
• A recent $50 million commercial paper issuance on Solana by JPMorgan and Galaxy Digital demonstrated the potential of tokenized debt but also highlighted that institutions will not transfer assets on-chain at volume until improvements in privacy and execution certainty are achieved.

Changpeng "CZ" Zhao, co-founder of Binance, emphasizes that the lack of privacy in cryptocurrency hampers everyday use, reflecting sentiments shared by panelists at CoinDesk Consensus Hong Kong, who identified it as an obstacle to extensive institutional adoption.

The complete transparency of blockchain technology is often promoted as the ultimate means to democratize finance against opaque banks and established financial institutions. However, this reality also allows anyone globally to monitor your transaction amounts, wallet balances, and dealings.

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Imagine sending your salary or completing a significant business transaction while the entire world observes every detail – not ideal, right?

This is exactly the dilemma at hand. The cryptocurrency sector has been advocating for both mainstream and institutional acceptance for years, but this same “killer feature” of total transparency without privacy is severely hindering progress.

"The absence of privacy may be the crucial element needed for the adoption of crypto payments. Consider a scenario where a company compensates its employees in cryptocurrency on-chain. With the existing state of crypto, anyone can essentially determine how much each individual at the company is earning (by simply checking the sending address)," CZ expressed on X on Sunday.

Concerns echoed by institutions

Fabio Frontini, CEO of Abraxas Capital Management, emphasized the importance of privacy in high-value institutional transactions if public blockchains are to become standard on Wall Street.

"Privacy—especially for significant transactions—is a critical factor, particularly for institutional participants," stated Fabio Frontini, CEO of Abraxas Capital Management. "Complete transparency isn’t necessarily beneficial. In fact, it is preferable for transactions to be auditable and visible, but only to select individuals who have a right to know who is behind them," Frontini remarked during the panel titled "The 2026 Outlook: The Institutional Market Cycle," held in Hong Kong last week.

Frontini was addressing a query regarding when the institutional application of blockchain for issuing traditional financial instruments like commercial paper will transition from a trial phase to a regular practice. Wall Street firm JPMorgan tested this concept in December by facilitating a groundbreaking $50 million U.S. commercial paper issuance for Galaxy Digital Holdings LP on the Solana blockchain.

Coinbase Global and Franklin Templeton participated in the transaction, with issuance and redemption settled in Circle’s USDC stablecoin for nearly instantaneous delivery-versus-payment. JPMorgan was responsible for structuring and creating the on-chain tokens, while Galaxy Digital Partners LLC served as the structuring agent.

This significant transaction underscored the applicability of public blockchains like Solana for tokenizing debt, while also revealing the associated lack of privacy.

Emma Lovett, the credit lead for the Markets Distributed Ledger Technology team at JP Morgan, a panelist in the discussion, emphasized that institutions will refrain from transferring substantial assets on-chain at scale until they can be assured that the system will not expose their information.

"They need to be assured that it won’t be easy for someone to discover their address and gain access to all their transaction history—that’s extremely important," Lovett stated.

Thomas Restout, group CEO of the institutional-grade liquidity provider B2C2, concurred that privacy is essential, while also highlighting "certainty of execution" as another vital aspect.

"It remains a sector that institutions find uncomfortable. They also require reliable partners. Other chains that have opted for privacy are advancing significantly for institutional use. Therefore, if you are a large institution, you must consider that you won’t be testing this approach with $10,000—you will be looking at it for $10 trillion. Consequently, the level of certainty required to operate at that scale is exceptionally high," he explained.