Blockchain promises transparency, but the real-world financial industry requires privacy. As traditional assets enter the on-chain era, this contradiction becomes more acute.

Regulated financial institutions want to go on-chain but face a dilemma: either sacrifice the privacy of sensitive information to achieve full transparency or abandon the convenience of on-chain operations and stick to traditional methods. In this deadlock, some public chains are attempting to break through from a technical perspective.

Through a combination of zero-knowledge proofs and privacy modules, certain underlying projects enable institutions to deploy applications on-chain while simultaneously protecting transaction-sensitive information and granting regulatory authorities necessary audit permissions. This balance is crucial for the development of RWA tokenization and compliant DeFi.

There have already been attempts in practice. Some projects have partnered with local licensed exchanges to launch on-chain trading platforms aimed at securely transferring hundreds of millions of euros worth of traditional assets onto the blockchain. It sounds ambitious, but it is indeed happening—moving from technical validation to real-world application.

Privacy and compliance are not mutually exclusive. The key lies in whether the underlying design is sufficiently sophisticated to truly provide usable solutions for institutional-grade applications. This may be the area where public chains need to compete.