The core issue isn’t whether privacy exists, but which specific form of privacy we should prioritize.
Blockchains are shifting toward private networks. The remaining debate centers on the type of privacy the sector will ultimately develop, according to Schiller.
Originally designed as open networks in line with open-source principles, blockchains are now moving toward private systems. This transition is happening more quickly than many anticipate.
This month, Tempo — a payment blockchain backed by Stripe, which secured $500 million at a $5 billion valuation, with Visa, Mastercard, Paradigm, and UBS as investors — released a comprehensive architectural plan for private enterprise stablecoin transactions. Tempo isn’t a niche privacy-focused startup. It’s arguably the most institutionally supported blockchain launch in recent years, created by experts who deeply understand the needs of banks, payment processors, and enterprises. When a network with such a strong background makes privacy a key focus from day one, it’s not just a hint. It’s a definitive statement.
The debate over whether institutional chains will be private has been resolved. What remains is the more complex challenge: what kind of privacy are we actually constructing?
The issue with public chains
Bitcoin addressed a long-standing challenge for computer scientists and bankers: how to transfer value between strangers without relying on a trusted intermediary. Ethereum expanded on this by introducing programmable value alongside value transfer — smart contracts that could encode agreements, automate settlement, and eliminate entire categories of middlemen. Then came stablecoins, which combined programmability with the stability of the dollar, leading to the migration of real-world assets to onchain protocols.
Each wave has attracted greater institutional interest, capital, and ambition. Now, as regulatory clarity emerges, institutions are prepared to deploy resources onchain.
But there’s one major obstacle holding them back — a fundamental flaw that grows more critical as scale increases.
Everything is visible. Every wallet. Every balance. Every transaction, in real time, is readable by anyone with a browser. In financial markets, this is not a feature. It is an existential problem. Imagine if every hedge fund’s positions, every corporate treasury’s holdings, every pension fund’s rebalancing trade appeared on a public screen the moment it was executed. Sophisticated counterparties would front-run. Competitors would map your strategy. Criminals would identify targets. The financial system as it exists today would seize up overnight.
Blockchains have been asking institutions to accept exactly that. Tempo’s announcement on April 16 is the clearest possible signal that institutions have finally said: no.
Architecture is destiny
Here is where the conversation gets more consequential — and more nuanced.
Tempo’s solution is Zones: private parallel blockchains connected to the main network. Within a Zone, participants transact privately. The public sees only cryptographic proofs of validity, not underlying data. Compliance controls travel with the token automatically. Assets remain interoperable with Tempo Mainnet. For enterprises running payroll, treasury operations, or settlement workflows, it is a thoughtful and practical design.
But Tempo’s privacy model is operator-visible. The Zone operator — an enterprise or infrastructure provider — sees all transactions within its Zone. The public sees nothing. The operator sees everything. For many regulated institutions, this is acceptable, and may even be required. But it means privacy is contingent on trusting an intermediary. You have moved the visibility problem; you have not eliminated it.
This is not a criticism of Tempo. It is a description of a genuine architectural choice — one with real consequences for anyone thinking carefully about risk.
Zero-knowledge cryptography offers a different path. ZK proofs allow a party to prove that a transaction is valid without revealing the underlying data. A new generation of ZK-native blockchains builds this privacy-preserving functionality into the execution layer itself. Accounts execute transactions locally, with the chain storing only a cryptographic commitment. Nothing sensitive ever touches a public ledger. Transaction history is not browsable. And crucially, no operator has a god’s-eye view — privacy is enforced at the base layer, not delegated to an intermediary.
If Bitcoin gave us trustless transfer and Ethereum gave us programmable trust, ZK-native blockchains offer verifiable privacy: the ability to prove that everything happened correctly without revealing what actually happened.
Compliance without full transparency
The obvious objection is regulatory. Privacy and compliance have long been framed as incompatible — oil and water. That framing is becoming obsolete.
Regulatory compliance does not require that everyone can see your transactions. It requires that the right parties, under the right conditions, can verify that your transactions were legitimate. That is a meaningful distinction, and it is one that ZK cryptography is uniquely positioned to enforce. Selective, programmable disclosure — revealing what regulators need to see, nothing more — is not a workaround. It is a more precise implementation of what compliance actually demands.
Tempo’s model handles this at the operator level. ZK-native approaches handle it at the cryptographic level. Both satisfy the compliance requirement. But they distribute trust very differently.
The question that matters
The financial industry knows it needs to move onchain. It now knows — Tempo’s announcement makes this undeniable — that it cannot do so on fully public infrastructure. The era of public-by-default blockchains as the assumed standard for institutional finance is ending.
What comes next depends on a choice the industry is only beginning to make clearly: privacy through trusted operators, or privacy through cryptographic guarantees that require no trust at all.
Both are legitimate answers. But they are not equivalent. The privacy model you choose determines your risk surface, your compliance posture, and your exposure to the failure modes of the intermediaries you depend on. Architecture is not a technical detail to be resolved later. It is the decision that determines everything else.
The question for the industry is not whether privacy. That debate is over.
The question is what sort of privacy — and who, if anyone, you are willing to trust with the view.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of Decryptnews, Inc. or its owners and affiliates.