Bitwise CIO: Privacy Could Become the Next "Killer App"

Golden Finance reports that on May 13, Bitwise Chief Investment Officer Matt Hougan stated that privacy is becoming the next core infrastructure focus in the cryptocurrency industry. Recently, three institutional-grade blockchains focused on stablecoins and asset tokenization—Arc, Canton, and Tempo—have collectively raised over $1 billion, indicating a rapid increase in institutional demand for “privacy-friendly on-chain financial systems.”
Among them, stablecoin issuer Circle raised $222 million for Arc, with an estimated valuation of about $3 billion; Digital Asset’s Canton blockchain is reportedly seeking $300 million in funding at a valuation of $2 billion; and Tempo, supported by Stripe and Paradigm, previously completed a $500 million funding round, with a valuation of $5 billion.
Hougan pointed out that this wave of funding reflects three major trends: the gradual clarification of the U.S. regulatory framework, increased institutional demand for on-chain privacy, and intensified competition among new blockchain networks supported by large enterprises. Current public blockchains still face structural trade-offs between speed, cost, security, and privacy, while the scenarios of stablecoins and RWA tokenization require systems to have high performance, compliance, and privacy capabilities, making “verifiable privacy” an essential prerequisite for institutions adopting on-chain finance.